ý | 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 | 72-1074903 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
5445 Triangle Parkway, Peachtree Corners, Georgia | 30092 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Class | Outstanding at November 1, 2018 | |
Common Stock, $0.001 par value | 122,850,784 |
Page | ||
PART I—FINANCIAL INFORMATION | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II—OTHER INFORMATION | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
September 30, 20181 | December 31, 2017 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 924,442 | $ | 913,595 | ||||
Restricted cash | 264,108 | 217,275 | ||||||
Accounts and other receivables (less allowance for doubtful accounts of $52,022 at September 30, 2018 and $46,031 at December 31, 2017) | 1,811,339 | 1,420,011 | ||||||
Securitized accounts receivable—restricted for securitization investors | 931,000 | 811,000 | ||||||
Prepaid expenses and other current assets | 202,102 | 187,820 | ||||||
Total current assets | 4,132,991 | 3,549,701 | ||||||
Property and equipment, net | 184,979 | 180,057 | ||||||
Goodwill | 4,517,348 | 4,715,823 | ||||||
Other intangibles, net | 2,438,627 | 2,724,957 | ||||||
Investments | 33,032 | 32,859 | ||||||
Other assets | 143,913 | 114,962 | ||||||
Total assets | $ | 11,450,890 | $ | 11,318,359 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,616,949 | $ | 1,437,314 | ||||
Accrued expenses | 252,069 | 238,472 | ||||||
Customer deposits | 825,371 | 732,171 | ||||||
Securitization facility | 931,000 | 811,000 | ||||||
Current portion of notes payable and lines of credit | 768,548 | 805,512 | ||||||
Other current liabilities | 90,531 | 71,033 | ||||||
Total current liabilities | 4,484,468 | 4,095,502 | ||||||
Notes payable and other obligations, less current portion | 2,773,378 | 2,902,104 | ||||||
Deferred income taxes | 506,310 | 518,912 | ||||||
Other noncurrent liabilities | 124,486 | 125,319 | ||||||
Total noncurrent liabilities | 3,404,174 | 3,546,335 | ||||||
Commitments and contingencies (Note 13) | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value; 475,000,000 shares authorized; 122,823,669 shares issued and 88,648,486 shares outstanding at September 30, 2018; and 122,083,059 shares issued and 89,803,982 shares outstanding at December 31, 2017 | 123 | 122 | ||||||
Additional paid-in capital | 2,316,753 | 2,214,224 | ||||||
Retained earnings | 3,515,657 | 2,958,921 | ||||||
Accumulated other comprehensive loss | (944,746 | ) | (551,857 | ) | ||||
Less treasury stock (34,175,183 shares at September 30, 2018 and 32,279,077 shares at December 31, 2017) | (1,325,539 | ) | (944,888 | ) | ||||
Total stockholders’ equity | 3,562,248 | 3,676,522 | ||||||
Total liabilities and stockholders’ equity | $ | 11,450,890 | $ | 11,318,359 |
1Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASC 606") and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effect of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its annual report on Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect the impact of ASC 606. See footnote 1, "Summary of Significant Accounting Policies", in the accompanying notes to the unaudited consolidated financial statements. |
See accompanying notes to unaudited consolidated financial statements. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018¹ | 2017 | 2018¹ | 2017 | |||||||||||||
Revenues, net | $ | 619,586 | $ | 577,877 | $ | 1,790,070 | $ | 1,639,547 | ||||||||
Expenses: | ||||||||||||||||
Merchant commissions | — | 27,687 | — | 82,690 | ||||||||||||
Processing | 128,400 | 111,283 | 356,086 | 316,429 | ||||||||||||
Selling | 44,806 | 45,060 | 135,926 | 122,854 | ||||||||||||
General and administrative | 98,023 | 92,054 | 284,718 | 275,095 | ||||||||||||
Depreciation and amortization | 67,267 | 69,156 | 207,379 | 198,731 | ||||||||||||
Operating income | 281,090 | 232,637 | 805,961 | 643,748 | ||||||||||||
Investment loss | 7,147 | 47,766 | 7,147 | 52,497 | ||||||||||||
Other expense (income), net | 303 | (175,271 | ) | 465 | (173,626 | ) | ||||||||||
Interest expense, net | 36,072 | 29,344 | 100,287 | 76,322 | ||||||||||||
Loss on extinguishment of debt | — | 3,296 | — | 3,296 | ||||||||||||
Total other expense (income) | 43,522 | (94,865 | ) | 107,899 | (41,511 | ) | ||||||||||
Income before income taxes | 237,568 | 327,502 | 698,062 | 685,259 | ||||||||||||
Provision for income taxes | 79,874 | 124,679 | 188,579 | 227,756 | ||||||||||||
Net income | $ | 157,694 | $ | 202,823 | $ | 509,483 | $ | 457,503 | ||||||||
Basic earnings per share | $ | 1.78 | $ | 2.23 | $ | 5.72 | $ | 4.99 | ||||||||
Diluted earnings per share | $ | 1.71 | $ | 2.18 | $ | 5.50 | $ | 4.87 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic shares | 88,456 | 90,751 | 89,126 | 91,619 | ||||||||||||
Diluted shares | 92,081 | 93,001 | 92,671 | 93,923 |
1 Reflects the impact of the Company's adoption of ASC 606 and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effect of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its annual report on Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect the impact of ASC 606. See footnote 1, "Summary of Significant Accounting Policies", in the accompanying notes to the unaudited consolidated financial statements. |
See accompanying notes to unaudited consolidated financial statements. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 157,694 | $ | 202,823 | $ | 509,483 | $ | 457,503 | ||||||||
Other comprehensive (loss) income: | ||||||||||||||||
Foreign currency translation (losses) gains, net of tax | (74,058 | ) | 112,301 | (392,889 | ) | 168,655 | ||||||||||
Reclassification of foreign currency translation loss to investment, net of tax | — | 31,381 | — | 31,381 | ||||||||||||
Total other comprehensive (loss) income | (74,058 | ) | 143,682 | (392,889 | ) | 200,036 | ||||||||||
Total comprehensive income | $ | 83,636 | $ | 346,505 | $ | 116,594 | $ | 657,539 |
Nine Months Ended September 30, | ||||||||
2018¹ | 2017¹ | |||||||
Operating activities | ||||||||
Net income | $ | 509,483 | $ | 457,503 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 38,174 | 35,096 | ||||||
Stock-based compensation | 54,207 | 68,897 | ||||||
Provision for losses on accounts receivable | 43,520 | 35,949 | ||||||
Amortization of deferred financing costs and discounts | 4,035 | 5,411 | ||||||
Amortization of intangible assets | 165,002 | 158,897 | ||||||
Amortization of premium on receivables | 4,202 | 4,738 | ||||||
Loss on extinguishment of debt | — | 3,296 | ||||||
Deferred income taxes | (6,334 | ) | (38,092 | ) | ||||
Investment loss | 7,147 | 52,497 | ||||||
Gain on disposition of business | — | (174,984 | ) | |||||
Other non-cash operating income | (140 | ) | (49 | ) | ||||
Changes in operating assets and liabilities (net of acquisitions): | ||||||||
Accounts and other receivables | (640,859 | ) | (440,011 | ) | ||||
Prepaid expenses and other current assets | (19,618 | ) | (86,648 | ) | ||||
Other assets | (19,922 | ) | (15,378 | ) | ||||
Accounts payable, accrued expenses and customer deposits | 416,483 | 364,473 | ||||||
Net cash provided by operating activities | 555,380 | 431,595 | ||||||
Investing activities | ||||||||
Acquisitions, net of cash acquired | (3,799 | ) | (602,298 | ) | ||||
Purchases of property and equipment | (56,312 | ) | (49,459 | ) | ||||
Proceeds from disposal of a business | — | 316,501 | ||||||
Other | (11,192 | ) | (6,327 | ) | ||||
Net cash used in investing activities | (71,303 | ) | (341,583 | ) | ||||
Financing activities | ||||||||
Proceeds from issuance of common stock | 48,322 | 20,192 | ||||||
Repurchase of common stock | (380,651 | ) | (402,392 | ) | ||||
Borrowings on securitization facility, net | 120,000 | 203,000 | ||||||
Deferred financing costs paid and debt discount | (166 | ) | (11,230 | ) | ||||
Proceeds from issuance of notes payable | — | 780,656 | ||||||
Principal payments on notes payable | (103,500 | ) | (388,656 | ) | ||||
Borrowings from revolver | 834,019 | 845,000 | ||||||
Payments on revolver | (897,861 | ) | (804,808 | ) | ||||
Borrowings on swing line of credit, net | 23,735 | 7,800 | ||||||
Other | (230 | ) | 537 | |||||
Net cash (used in) provided by financing activities | (356,332 | ) | 250,099 | |||||
Effect of foreign currency exchange rates on cash | (70,065 | ) | 34,390 | |||||
Net increase in cash and cash equivalents and restricted cash | 57,680 | 374,501 | ||||||
Cash and cash equivalents and restricted cash, beginning of period | 1,130,870 | 643,770 | ||||||
Cash and cash equivalents and restricted cash, end of period | $ | 1,188,550 | $ | 1,018,271 | ||||
Supplemental cash flow information | ||||||||
Cash paid for interest | $ | 113,785 | $ | 79,144 | ||||
Cash paid for income taxes | $ | 162,563 | $ | 257,349 |
1 Reflects the impact of the Company's adoption of Accounting Standards Update 2016-18, "Statement of Cash Flows (Topic 230)", which was adopted by the Company on January 1, 2018 and applied retrospectively to results for 2017. The adoption of Topic 230 resulted in the statement of cash flows presenting the changes in the total of cash, cash equivalents and restricted cash. As a result, the Company will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. |
See accompanying notes to unaudited consolidated financial statements. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2018 As Reported | Impact of ASC 606 | 2018 Prior to Adoption | 2018 As Reported | Impact of ASC 606 | 2018 Prior to Adoption | |||||||||||||||||||
Revenues, net | $ | 619,586 | $ | 27,958 | $ | 647,544 | $ | 1,790,070 | $ | 75,513 | $ | 1,865,583 | ||||||||||||
Expenses: | ||||||||||||||||||||||||
Merchant commissions | — | 30,909 | 30,909 | — | 84,199 | 84,199 | ||||||||||||||||||
Processing | 128,400 | (2,498 | ) | 125,902 | 356,086 | (7,282 | ) | 348,804 | ||||||||||||||||
Selling | 44,806 | 875 | 45,681 | 135,926 | 3,392 | 139,318 | ||||||||||||||||||
General and administrative | 98,023 | — | 98,023 | 284,718 | — | 284,718 | ||||||||||||||||||
Depreciation and amortization | 67,267 | — | 67,267 | 207,379 | — | 207,379 | ||||||||||||||||||
Operating income | 281,090 | (1,328 | ) | 279,762 | 805,961 | (4,796 | ) | 801,165 | ||||||||||||||||
Total other expense | 43,522 | — | 43,522 | 107,899 | — | 107,899 | ||||||||||||||||||
Income before income taxes | 237,568 | (1,328 | ) | 236,240 | 698,062 | (4,796 | ) | 693,266 | ||||||||||||||||
Provision for income taxes | 79,874 | (498 | ) | 79,376 | 188,579 | (1,346 | ) | 187,233 | ||||||||||||||||
Net income | $ | 157,694 | $ | (830 | ) | $ | 156,864 | $ | 509,483 | $ | (3,450 | ) | $ | 506,033 | ||||||||||
Basic earnings per share | $ | 1.78 | $ | (0.01 | ) | $ | 1.77 | $ | 5.72 | $ | (0.04 | ) | $ | 5.68 | ||||||||||
Diluted earnings per share | $ | 1.71 | $ | (0.01 | ) | $ | 1.70 | $ | 5.50 | $ | (0.04 | ) | $ | 5.46 |
Revenue, net by Product Category* | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2018 | % | 2018 | % | ||||||||||
Fuel | $ | 276 | 45 | % | $ | 805 | 45 | % | |||||
Corporate Payments | 105 | 17 | % | 300 | 17 | % | |||||||
Tolls | 78 | 13 | % | 250 | 14 | % | |||||||
Lodging | 48 | 8 | % | 132 | 7 | % | |||||||
Gift | 57 | 9 | % | 139 | 8 | % | |||||||
Other | 56 | 9 | % | 164 | 9 | % | |||||||
Consolidated Revenues, net | $ | 620 | 100 | % | $ | 1,790 | 100 | % |
Revenue, net by Geography* | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2018 | % | 2018 | % | ||||||||||
United States | $ | 391 | 63 | % | 1,082 | 60 | % | ||||||
Brazil | 92 | 15 | % | 296 | 17 | % | |||||||
United Kingdom | 63 | 10 | % | 192 | 11 | % | |||||||
Other | 74 | 12 | % | 220 | 12 | % | |||||||
Consolidated Revenues, net | $ | 620 | 100 | % | $ | 1,790 | 100 | % |
a. | The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify. |
b. | The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future. |
c. | The costs are expected to be recovered. |
September 30, 2018 | December 31, 2017 | |||||||
Gross domestic accounts receivable | $ | 951,331 | $ | 661,677 | ||||
Gross domestic securitized accounts receivable | 931,000 | 811,000 | ||||||
Gross foreign receivables | 912,030 | 804,365 | ||||||
Total gross receivables | 2,794,361 | 2,277,042 | ||||||
Less allowance for doubtful accounts | (52,022 | ) | (46,031 | ) | ||||
Net accounts and securitized accounts receivable | $ | 2,742,339 | $ | 2,231,011 |
2018 | 2017 | |||||||
Allowance for doubtful accounts beginning of period | $ | 46,031 | $ | 32,506 | ||||
Provision for bad debts | 43,520 | 35,949 | ||||||
Write-offs | (37,529 | ) | (20,676 | ) | ||||
Allowance for doubtful accounts end of period | $ | 52,022 | $ | 47,779 |
• | Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets. |
• | Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
• | Level 3: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. |
Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
September 30, 2018 | ||||||||||||||||
Assets: | ||||||||||||||||
Repurchase agreements | $ | 526,730 | $ | — | $ | 526,730 | $ | — | ||||||||
Money market | 50,395 | — | 50,395 | — | ||||||||||||
Certificates of deposit | 172 | — | 172 | — | ||||||||||||
Foreign exchange contracts | 28,293 | — | 28,293 | — | ||||||||||||
Total assets | $ | 605,590 | $ | — | $ | 605,590 | $ | — | ||||||||
Cash collateral for foreign exchange contracts | $ | 26,499 | $ | — | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | 28,626 | $ | — | $ | 28,626 | — | |||||||||
Total liabilities | $ | 28,626 | $ | — | $ | 28,626 | $ | — | ||||||||
Cash collateral obligation for foreign exchange contracts | $ | 12,307 | $ | — | $ | — | $ | — | ||||||||
December 31, 2017 | ||||||||||||||||
Assets: | ||||||||||||||||
Repurchase agreements | $ | 420,838 | $ | — | $ | 420,838 | $ | — | ||||||||
Money market | 50,423 | — | 50,423 | — | ||||||||||||
Certificates of deposit | 7,417 | — | 7,417 | — | ||||||||||||
Foreign exchange contracts | 39,045 | 10 | 39,035 | — | ||||||||||||
Total assets | $ | 517,723 | $ | 10 | $ | 517,713 | $ | — | ||||||||
Cash collateral for foreign exchange contracts | $ | 12,540 | $ | — | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | 26,888 | $ | 67 | $ | 26,821 | $ | — | ||||||||
Total liabilities | $ | 26,888 | $ | 67 | $ | 26,821 | $ | — | ||||||||
Cash collateral obligation for foreign exchange contracts | $ | 10,882 | $ | — | $ | — | $ | — |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Stock options | $ | 11,154 | $ | 16,212 | $ | 33,205 | $ | 42,254 | ||||||||
Restricted stock | 9,548 | 8,443 | 21,002 | 26,643 | ||||||||||||
Stock-based compensation | $ | 20,702 | $ | 24,655 | $ | 54,207 | $ | 68,897 |
Unrecognized Compensation Cost | Weighted Average Period of Expense Recognition (in Years) | |||||
Stock options | $ | 68,687 | 1.41 | |||
Restricted stock | 13,456 | 0.53 | ||||
Total | $ | 82,143 |
Shares | Weighted Average Exercise Price | Options Exercisable at End of Period | Weighted Average Exercise Price of Exercisable Options | Weighted Average Fair Value of Options Granted During the Period | Aggregate Intrinsic Value | |||||||||||||||||
Outstanding at December 31, 2017 | 8,031 | $ | 109.78 | 4,029 | $ | 75.80 | $ | 663,815 | ||||||||||||||
Granted | 408 | 204.57 | $ | 50.04 | ||||||||||||||||||
Exercised | (692 | ) | 71.50 | 108,164 | ||||||||||||||||||
Forfeited | (40 | ) | 149.22 | |||||||||||||||||||
Outstanding at September 30, 2018 | 7,707 | $ | 118.03 | 4,588 | $ | 91.27 | $ | 846,395 | ||||||||||||||
Expected to vest as of September 30, 2018 | 7,707 | $ | 118.03 |
September 30, | ||||||
2018 | 2017 | |||||
Risk-free interest rate | 2.57 | % | 1.65 | % | ||
Dividend yield | — | — | ||||
Expected volatility | 26.93 | % | 28.02 | % | ||
Expected life (in years) | 3.8 | 3.4 |
Shares | Weighted Average Grant Date Fair Value | ||||||
Outstanding at December 31, 2017 | 365 | $ | 155.58 | ||||
Granted | 104 | 190.18 | |||||
Vested | (49 | ) | 157.66 | ||||
Canceled or forfeited | (26 | ) | 157.39 | ||||
Outstanding at September 30, 2018 | 394 | $ | 173.21 |
Restricted cash | $ | 37,666 | |
Trade and other receivables | 61,806 | ||
Prepaid expenses and other | 18,071 | ||
Property and equipment | 7,106 | ||
Other long term assets | 10,025 | ||
Goodwill | 500,212 | ||
Customer relationships and other identifiable intangible assets | 271,793 | ||
Liabilities assumed | (197,335 | ) | |
Deferred tax liabilities | (93,364 | ) | |
Aggregate purchase price | $ | 615,980 | |
Useful Lives (in Years) | Value | |||
Banking relationships | 20 | $ | 705 | |
Trade name and trademarks | Indefinite | 35,110 | ||
Technology | 5 | 16,039 | ||
Customer relationships - excluding Accounts Payable Solutions | 7-18 | 178,190 | ||
Customer relationships - Accounts Payable Solutions | 20 | 41,749 | ||
$ | 271,793 |
Trade and other receivables | $ | 38,038 | |
Prepaid expenses and other | 1,426 | ||
Property and equipment | 5,745 | ||
Goodwill | 59,946 | ||
Other intangible assets | 53,459 | ||
Liabilities assumed | (32,274 | ) | |
Deferred tax liabilities | (17,217 | ) | |
Aggregate purchase prices | $ | 109,123 |
Useful Lives (in Years) | Value | |||
Trade name and trademarks | 1 | $ | 180 | |
Technology | 4 | 1,750 | ||
Customer relationships | 8 | 51,529 | ||
$ | 53,459 |
December 31, 2017 | Acquisition Accounting Adjustments | Foreign Currency | September 30, 2018 | |||||||||||||
Segment | ||||||||||||||||
North America | $ | 3,084,123 | $ | 4,036 | $ | (7,152 | ) | $ | 3,081,007 | |||||||
International | 1,631,700 | 20 | (195,379 | ) | 1,436,341 | |||||||||||
$ | 4,715,823 | $ | 4,056 | $ | (202,531 | ) | $ | 4,517,348 |
September 30, 2018 | December 31, 2017 | |||||||||||||||||||||||||
Weighted- Avg Useful Lives (Years) | Gross Carrying Amounts | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amounts | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||
Customer and vendor relationships | 17.1 | $ | 2,609,056 | $ | (734,726 | ) | $ | 1,874,330 | $ | 2,698,428 | $ | (605,347 | ) | $ | 2,093,081 | |||||||||||
Trade names and trademarks—indefinite lived | N/A | 476,820 | — | 476,820 | 499,587 | — | 499,587 | |||||||||||||||||||
Trade names and trademarks—other | 13.8 | 2,963 | (2,457 | ) | 506 | 2,986 | (2,207 | ) | 779 | |||||||||||||||||
Software | 5.9 | 212,288 | (144,880 | ) | 67,408 | 219,019 | (116,654 | ) | 102,365 | |||||||||||||||||
Non-compete agreements | 4.2 | 45,786 | (26,223 | ) | 19,563 | 48,221 | (19,076 | ) | 29,145 | |||||||||||||||||
Total other intangibles | $ | 3,346,913 | $ | (908,286 | ) | $ | 2,438,627 | $ | 3,468,241 | $ | (743,284 | ) | $ | 2,724,957 |
September 30, 2018 | December 31, 2017 | |||||||
Term notes payable—domestic(a), net of discounts | $ | 2,892,205 | $ | 2,993,667 | ||||
Revolving line of credit A Facility—domestic(a) | 440,000 | 635,000 | ||||||
Revolving line of credit B Facility—foreign(a) | 140,717 | 28,334 | ||||||
Revolving line of credit B Facility—swing line(a) | 29,407 | 6,879 | ||||||
Other debt(c) | 39,597 | 43,736 | ||||||
Total notes payable and other obligations | 3,541,926 | 3,707,616 | ||||||
Securitization Facility(b) | 931,000 | 811,000 | ||||||
Total notes payable, credit agreements and Securitization Facility | $ | 4,472,926 | $ | 4,518,616 | ||||
Current portion | $ | 1,699,548 | $ | 1,616,512 | ||||
Long-term portion | 2,773,378 | 2,902,104 | ||||||
Total notes payable, credit agreements and Securitization Facility | $ | 4,472,926 | $ | 4,518,616 |
(a) | The Company has a Credit Agreement, which has been amended multiple times, most recently on August 30, 2018, and provides for senior secured credit facilities consisting of a revolving A credit facility (Revolver) in the amount of $1.285 billion, a term loan A facility in the amount of $2.69 billion and a term loan B facility in the amount of $350 million as of September 30, 2018. The revolving credit facility consists of (a) a revolving A credit facility in the amount of $800 million, with sublimits for letters of credit and swing line loans, (b) a revolving B facility in the amount of $450 million for swing line loans and multi-currency borrowings and, (c) a revolving C facility in the amount of $35 million for multi-currency borrowings in Australian Dollars or New Zealand Dollars. The Credit Agreement also includes an accordion feature for borrowing an additional $750 million in term A, term B, revolver A or revolver B debt. Proceeds from the credit facilities may be used for working capital purposes, acquisitions, and other general corporate purposes. The maturity dates are August 2, 2022 for term A loan, revolving loans, and letters of credit under the Credit Agreement and August 2, 2024 for the term B loan. |
(b) | The Company is party to a $1.2 billion receivables purchase agreement (Securitization Facility) that was amended on August 30, 2018. There is a program fee equal to one month LIBOR plus 0.90% or the Commercial Paper Rate plus 0.80%. The program fee was 2.28% plus 0.87% as of September 30, 2018 and 1.55% plus 0.86% as of December 31, 2017. The unused facility fee is payable at a rate of 0.40% per annum as of September 30, 2018 and December 31, 2017. The Company has unamortized debt issuance costs of $1.4 million related to the Securitization Facility as of September 30, 2018 recorded within other assets in the consolidated balance sheet. |
(c) | Other debt includes the long-term portion of deferred payments associated with business acquisitions. |
2018 | 2017 | |||||||||||||
Computed tax expense at the U.S. federal tax rate | $ | 49,889 | 21.0 | % | $ | 114,626 | 35.0 | % | ||||||
Changes resulting from: | ||||||||||||||
Foreign income tax differential | 2,359 | 1.0 | % | (9,247 | ) | (2.8 | )% | |||||||
Excess tax benefits related to stock-based compensation | (7,562 | ) | (3.2 | )% | (4,360 | ) | (1.3 | )% | ||||||
State taxes net of federal benefits | 3,119 | 1.3 | % | 5,926 | 1.8 | % | ||||||||
Foreign-sourced nontaxable income | (5,620 | ) | (2.4 | )% | 1,558 | 0.5 | % | |||||||
Foreign withholding taxes1 | 4,578 | 1.9 | % | 3,065 | 0.9 | % | ||||||||
GILTI tax, net of foreign tax credits | 5,576 | 2.4 | % | — | — | % | ||||||||
Valuation allowance on investment loss | — | — | % | 16,718 | 5.1 | % | ||||||||
Transition tax, net of foreign tax credits | 22,731 | 9.6 | % | — | — | % | ||||||||
Other1 | 4,804 | 2.0 | % | (3,607 | ) | (1.1 | )% | |||||||
Provision for income taxes | $ | 79,874 | 33.6 | % | $ | 124,679 | 38.1 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 157,694 | $ | 202,823 | $ | 509,483 | $ | 457,503 | ||||||||
Denominator for basic earnings per share | 88,456 | 90,751 | 89,126 | 91,619 | ||||||||||||
Dilutive securities | 3,625 | 2,250 | 3,545 | 2,304 | ||||||||||||
Denominator for diluted earnings per share | 92,081 | 93,001 | 92,671 | 93,923 | ||||||||||||
Basic earnings per share | $ | 1.78 | $ | 2.23 | $ | 5.72 | $ | 4.99 | ||||||||
Diluted earnings per share | $ | 1.71 | $ | 2.18 | $ | 5.50 | $ | 4.87 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 20172 | 2018 | 20172 | |||||||||||||
Revenues, net:1 | ||||||||||||||||
North America | $ | 412,816 | $ | 368,006 | $ | 1,148,034 | $ | 1,040,949 | ||||||||
International | 206,770 | 209,871 | 642,036 | 598,598 | ||||||||||||
$ | 619,586 | $ | 577,877 | $ | 1,790,070 | $ | 1,639,547 | |||||||||
Operating income:1 | ||||||||||||||||
North America | $ | 177,769 | $ | 138,480 | $ | 495,095 | $ | 394,378 | ||||||||
International | 103,321 | 94,157 | 310,866 | 249,370 | ||||||||||||
$ | 281,090 | $ | 232,637 | $ | 805,961 | $ | 643,748 | |||||||||
Depreciation and amortization: | ||||||||||||||||
North America | $ | 39,049 | $ | 38,399 | $ | 116,041 | $ | 104,960 | ||||||||
International | 28,218 | 30,757 | 91,338 | 93,771 | ||||||||||||
$ | 67,267 | $ | 69,156 | $ | 207,379 | $ | 198,731 | |||||||||
Capital expenditures: | ||||||||||||||||
North America | $ | 12,604 | $ | 9,167 | $ | 32,700 | $ | 30,901 | ||||||||
International | 9,094 | 7,692 | 23,612 | 18,558 | ||||||||||||
$ | 21,698 | $ | 16,859 | $ | 56,312 | $ | 49,459 |
• | Forward contracts, which are commitments to buy or sell at a future date a currency at a contract price and will be settled in cash. |
• | Option contracts, which gives the purchaser, the right, but not the obligation to buy or sell within a specified time a currency at a contracted price that may be settled in cash. |
• | Swap contracts, which are commitments to settlement in cash at a future date or dates, usually on an overnight basis. |
Notional | |||||||
September 30, 2018 | December 31, 2017 | ||||||
Foreign exchange contracts: | |||||||
Swaps | $ | 330.4 | $ | 515.4 | |||
Futures, forwards and spot | 2,905.7 | 3,274.5 | |||||
Written options | 3,033.1 | 2,934.2 | |||||
Purchased options | 2,435.8 | 2,314.1 | |||||
Total | $ | 8,705.0 | $ | 9,038.1 |
September 30, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||
Fair Value, Gross | Fair Value, Net | Fair Value, Gross | Fair Value, Net | ||||||||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | Derivative Assets | Derivative Liabilities | Derivative Assets | Derivative Liabilities | Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||||
Derivatives - undesignated: | |||||||||||||||||||||||||||||||
Over the counter | $ | 75.3 | $ | 75.6 | $ | 28.3 | $ | 28.6 | $ | 80.4 | $ | 68.2 | $ | 39.0 | $ | 26.8 | |||||||||||||||
Exchange traded | — | — | — | — | — | 0.1 | — | 0.1 | |||||||||||||||||||||||
Foreign exchange contracts | 75.3 | 75.6 | 28.3 | 28.6 | 80.4 | 68.3 | 39.0 | 26.9 | |||||||||||||||||||||||
Cash collateral | 26.5 | 12.3 | 26.5 | 12.3 | 12.5 | 10.9 | 12.5 | 10.9 | |||||||||||||||||||||||
Total net derivative assets and liabilities | $ | 48.8 | $ | 63.3 | $ | 1.8 | $ | 16.3 | $ | 67.9 | $ | 57.4 | $ | 26.5 | $ | 16.0 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||
2018 | 20171 | 2018 | 20171 | |||||||||||||||||||||||||
(Unaudited) | Revenues, net | % of total revenues, net | Revenues, net | % of total revenues, net | Revenues, net | % of total revenues, net | Revenues, net | % of total revenues, net | ||||||||||||||||||||
North America | $ | 412.8 | 66.6 | % | $ | 368.0 | 63.7 | % | $ | 1,148.0 | 64.1 | % | $ | 1,040.9 | 63.5 | % | ||||||||||||
International | 206.8 | 33.4 | % | 209.9 | 36.3 | % | 642.0 | 35.9 | % | 598.6 | 36.5 | % | ||||||||||||||||
$ | 619.6 | 100.0 | % | $ | 577.9 | 100.0 | % | $ | 1,790.1 | 100.0 | % | $ | 1,639.5 | 100.0 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(Unaudited) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues, net | $ | 619.6 | $ | 577.9 | $ | 1,790.1 | $ | 1,639.5 | ||||||||
Net income | $ | 157.7 | $ | 202.8 | $ | 509.5 | $ | 457.5 | ||||||||
Net income per diluted share | $ | 1.71 | $ | 2.18 | $ | 5.50 | $ | 4.87 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(Unaudited) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Adjusted net income | $ | 246.6 | $ | 202.8 | $ | 717.9 | $ | 574.8 | ||||||||
Adjusted net income per diluted share | $ | 2.68 | $ | 2.18 | $ | 7.75 | $ | 6.12 |
Illustrative Merchant Payment Models | |||||||||||||||||
i) Cost Plus Mark-up: | ii) Percentage Discount: | iii) Fixed Fee: | |||||||||||||||
Wholesale Cost | $ | 2.86 | Retail Price | $ | 3.00 | Retail Price | $ | 3.00 | |||||||||
Mark-up | 0.05 | Discount (3%) | (0.09 | ) | Fixed Fee | (0.09 | ) | ||||||||||
Price Paid to Merchant | $ | 2.91 | Price Paid to Merchant | $ | 2.91 | Price Paid to Merchant | $ | 2.91 | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
(Unaudited) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Transactions (in millions) | |||||||||||||||||
North America | 380.8 | 398.4 | 1,257.5 | 1,256.9 | 1 | ||||||||||||
International2 | 277.8 | 275.9 | 810.6 | 806.1 | |||||||||||||
Total transactions | 658.6 | 674.3 | 2,068.1 | 2,062.9 | |||||||||||||
Revenue per transaction | |||||||||||||||||
North America | $ | 1.08 | $ | 0.92 | $ | 0.91 | $ | 0.83 | |||||||||
International | 0.74 | 0.76 | 0.79 | 0.74 | |||||||||||||
Consolidated revenue per transaction | 0.94 | 0.86 | 0.87 | 0.79 |
1 For purposes of comparability, reflects adjustment for 44.3 million non-recurring transactions at SVS in the first quarter of 2017 due to system driven balance inquiries. |
2 Reflects adjustments from previously disclosed amounts for the prior period to conform to current presentation. |
As Reported | Pro Forma and Macro Adjusted | |||||||||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||||||||||
(Unaudited)* | 2018¹ | 2017 | Change | % Change | 2018¹ | 2017¹ | Change | % Change | ||||||||||||||||||||||
FUEL 4 | ||||||||||||||||||||||||||||||
'- Transactions | 122.9 | 119.3 | 3.6 | 3 | % | 122.9 | 121.1 | 1.9 | 2 | % | ||||||||||||||||||||
'- Revenues, net per transaction | $ | 2.25 | $ | 2.32 | $ | (0.07 | ) | (3 | )% | $ | 2.15 | $ | 2.07 | $ | 0.08 | 4 | % | |||||||||||||
'- Revenues, net | $ | 276.0 | $ | 276.2 | $ | (0.3 | ) | — | % | $ | 263.8 | $ | 250.5 | $ | 13.3 | 5 | % | |||||||||||||
CORPORATE PAYMENTS | ||||||||||||||||||||||||||||||
'- Transactions | 13.1 | 10.9 | 2.2 | 20 | % | 13.1 | 11.1 | 2.0 | 18 | % | ||||||||||||||||||||
'- Revenues, net per transaction | $ | 8.05 | $ | 6.63 | $ | 1.42 | 21 | % | $ | 8.10 | $ | 7.52 | $ | 0.59 | 8 | % | ||||||||||||||
'- Revenues, net | $ | 105.5 | $ | 72.2 | $ | 33.3 | 46 | % | $ | 106.2 | $ | 83.2 | $ | 23.0 | 28 | % | ||||||||||||||
TOLLS | ||||||||||||||||||||||||||||||
'- Transactions2 | 221.9 | 226.1 | (4.2 | ) | (2 | )% | 221.9 | 226.1 | (4.2 | ) | (2 | )% | ||||||||||||||||||
'- Revenues, net per transaction | $ | 0.35 | $ | 0.37 | $ | (0.02 | ) | (4 | )% | $ | 0.44 | $ | 0.37 | $ | 0.07 | 19 | % | |||||||||||||
'- Revenues, net | $ | 77.8 | $ | 82.9 | $ | (5.2 | ) | (6 | )% | $ | 97.0 | $ | 82.9 | $ | 14.1 | 17 | % | |||||||||||||
LODGING | ||||||||||||||||||||||||||||||
'- Transactions | 4.5 | 4.1 | 0.4 | 11 | % | 4.5 | 4.6 | (0.1 | ) | (3 | )% | |||||||||||||||||||
'- Revenues, net per transaction | $ | 10.64 | $ | 8.14 | $ | 2.49 | 31 | % | $ | 10.64 | $ | 8.53 | $ | 2.10 | 25 | % | ||||||||||||||
'- Revenues, net | $ | 48.0 | $ | 33.2 | $ | 14.8 | 45 | % | $ | 48.0 | $ | 39.6 | $ | 8.4 | 21 | % | ||||||||||||||
GIFT | ||||||||||||||||||||||||||||||
'- Transactions | 277.6 | 294.1 | (16.5 | ) | (6 | )% | 277.6 | 294.1 | (16.5 | ) | (6 | )% | ||||||||||||||||||
'- Revenues, net per transaction | $ | 0.20 | $ | 0.19 | $ | 0.02 | 10 | % | $ | 0.20 | $ | 0.19 | $ | 0.02 | 10 | % | ||||||||||||||
'- Revenues, net | $ | 56.7 | $ | 54.8 | $ | 1.9 | 4 | % | $ | 56.7 | $ | 54.8 | $ | 1.9 | 4 | % | ||||||||||||||
OTHER3,4 | ||||||||||||||||||||||||||||||
'- Transactions | 18.6 | 19.7 | (1.2 | ) | (6 | )% | 18.6 | 19.7 | (1.1 | ) | (6 | )% | ||||||||||||||||||
'- Revenues, net per transaction | $ | 3.00 | $ | 2.97 | $ | 0.03 | 1 | % | $ | 3.13 | $ | 2.84 | $ | 0.29 | 10 | % | ||||||||||||||
'- Revenues, net | $ | 55.7 | $ | 58.5 | $ | (2.9 | ) | (5 | )% | $ | 58.1 | $ | 55.8 | $ | 2.3 | 4 | % | |||||||||||||
FLEETCOR CONSOLIDATED REVENUES | ||||||||||||||||||||||||||||||
'- Transactions | 658.6 | 674.3 | (15.7 | ) | (2 | )% | 658.6 | 676.7 | (18.1 | ) | (3 | )% | ||||||||||||||||||
'- Revenues, net per transaction | $ | 0.94 | $ | 0.86 | $ | 0.08 | 10 | % | $ | 0.96 | $ | 0.84 | $ | 0.12 | 14 | % | ||||||||||||||
'- Revenues, net | $ | 619.6 | $ | 577.9 | $ | 41.7 | 7 | % | $ | 629.8 | $ | 566.8 | $ | 63.0 | 11 | % |
* Columns may not calculate due to rounding. |
1 Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASC 606") and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effect of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its annual report on Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect the impact of ASC 606. For purposes of comparability, 2017 has been recast and is reconciled to GAAP in the section entitled “Management’s Use of Non-GAAP Financial Measures”, which includes certain estimates and assumptions made by the Company for the impact of ASC 606 on 2017 revenues, as the Company did not apply a full retrospective adoption. |
2 Reflects adjustments from previously disclosed amounts for the prior period to conform to current presentation. |
3 Other includes telematics, maintenance, food, and transportation related businesses. |
4 Fuel Cards product category further refined to Fuel, to reflect different ways that fuel is paid for by our customers and as a result, reflects immaterial reclassifications from previously disclosed amounts for the prior period. |
• | Merchant commissions—In certain of our card programs, we incur merchant commissions expense when we reimburse merchants with whom we have direct, contractual relationships for specific transactions where a customer purchases products or services from the merchant. In the card programs where it is paid, merchant commissions equal the difference between the price paid by us to the merchant and the merchant’s wholesale cost of the underlying products or services. The adoption of ASC 606 on January 1, 2018, resulted in a change in the presentation of amounts previously classified as merchant commissions, resulting in these amounts being recorded within revenues, net in periods beginning in 2018. |
• | Processing—Our processing expense consists of expenses related to processing transactions, servicing our customers and merchants, bad debt expense and cost of goods sold related to our hardware sales in certain businesses. Effective with the adoption of ASC 606 on January 1, 2018, certain third party processing expenses are netted with consolidated revenues, where the network is considered to be our customer. |
• | Selling—Our selling expenses consist primarily of wages, benefits, sales commissions (other than merchant commissions) and related expenses for our sales, marketing and account management personnel and activities. |
• | General and administrative—Our general and administrative expenses include compensation and related expenses (including stock-based compensation) for our executives, finance and accounting, information technology, human resources, legal and other administrative personnel. Also included are facilities expenses, third-party professional services fees, travel and entertainment expenses, and other corporate-level expenses. |
• | Depreciation and amortization—Our depreciation expenses include depreciation of property and equipment, consisting of computer hardware and software (including proprietary software development amortization expense), card-reading equipment, furniture, fixtures, vehicles and buildings and leasehold improvements related to office space. Our amortization expenses include amortization of intangible assets related to customer and vendor relationships, trade names and trademarks, software and non-compete agreements. We are amortizing intangible assets related to business acquisitions and certain private label contracts associated with the purchase of accounts receivable. |
• | Other operating, net—Our other operating, net includes other operating expenses and income items that do not relate to our core operations or that occur infrequently. |
• | Investment loss—Our investment results relate to our minority interest in Masternaut, a provider of telematics solutions to commercial fleets in Europe, which we historically accounted for using the equity method and recorded our share of earnings and losses. On September 30, 2017, we entered into an amended Masternaut investment agreement that resulted in the loss of significant influence, and we began accounting for the Masternaut investment by applying the cost method. Also includes impairment charges related to Masternaut and other cost method investments. |
• | Other expense (income), net—Our other expense (income), net includes proceeds/costs from the sale of assets, foreign currency transaction gains or losses and other miscellaneous operating costs and revenue. |
• | Interest expense, net—Our interest expense, net includes interest income on our cash balances and interest expense on our outstanding debt and on our Securitization Facility. We have historically invested our cash primarily in short-term money market funds. |
• | Loss on extinguishment of debt—Loss on extinguishment of debt relates to our write-off of debt issuance costs associated with the refinancing of our existing Credit Facility. |
• | Provision for income taxes—Our provision for income taxes consists primarily of corporate income taxes related to profits resulting from the sale of our products and services on a global basis. |
• | Global economic conditions—Our results of operations are materially affected by conditions in the economy generally, both in North America and internationally. Factors affected by the economy include our transaction volumes, the credit risk of our customers and changes in tax laws across the globe. These factors affected our businesses in both our North America and International segments. |
• | Foreign currency changes—Our results of operations are significantly impacted by changes in foreign currency rates; namely, by movements of the Australian dollar, Brazilian real, British pound, Canadian dollar, Czech koruna, Euro, Mexican peso, New Zealand dollar and Russian ruble, relative to the U.S. dollar. Approximately 60% and 63% of our revenue in the nine months ended September 30, 2018 and 2017, respectively, was derived in U.S. dollars and was not |
• | Fuel prices—Our fleet customers use our products and services primarily in connection with the purchase of fuel. Accordingly, our revenue is affected by fuel prices, which are subject to significant volatility. A change in retail fuel prices could cause a decrease or increase in our revenue from several sources, including fees paid to us based on a percentage of each customer’s total purchase. Changes in the absolute price of fuel may also impact unpaid account balances and the late fees and charges based on these amounts. See “Sources of Revenue” above for further information related to the absolute price of fuel. |
• | Fuel-price spread volatility—A portion of our revenue involves transactions where we derive revenue from fuel-price spreads, which is the difference between the price charged to a fleet customer for a transaction and the price paid to the merchant for the same transaction. In these transactions, the price paid to the merchant is based on the wholesale cost of fuel. The merchant’s wholesale cost of fuel is dependent on several factors including, among others, the factors described above affecting fuel prices. The fuel price that we charge to our customer is dependent on several factors including, among others, the fuel price paid to the merchant, posted retail fuel prices and competitive fuel prices. We experience fuel-price spread contraction when the merchant’s wholesale cost of fuel increases at a faster rate than the fuel price we charge to our customers, or the fuel price we charge to our customers decreases at a faster rate than the merchant’s wholesale cost of fuel. See “Sources of Revenue” above for further information related to fuel-price spreads. |
• | Acquisitions—Since 2002, we have completed over 75 acquisitions of companies and commercial account portfolios. Acquisitions have been an important part of our growth strategy, and it is our intention to continue to seek opportunities to increase our customer base and diversify our service offering through further strategic acquisitions. The impact of acquisitions has, and may continue to have, a significant impact on our results of operations and may make it difficult to compare our results between periods. |
• | Interest rates—Our results of operations are affected by interest rates. We are exposed to market risk to changes in interest rates on our cash investments and debt. |
• | Expenses— Over the long term, we expect that our general and administrative expense will decrease as a percentage of revenue as our revenue increases. To support our expected revenue growth, we plan to continue to incur additional sales and marketing expense by investing in our direct marketing, third-party agents, internet marketing, telemarketing and field sales force. |
• | Taxes— We pay taxes in many different taxing jurisdictions, including the U.S., most U.S. states and many non-U.S. jurisdictions. The tax rates in certain non-U.S. taxing jurisdictions are higher than the U.S. tax rate. Consequently, as our earnings fluctuate between taxing jurisdictions, our effective tax rate fluctuates. |
• | On August 9, 2017, we acquired Cambridge, a business to business (B2B) international payments provider, for approximately $616.0 million in cash, net of cash acquired of $94.5 million and inclusive of a note payable of $23.8 million. Cambridge processes B2B cross-border payments, assisting business clients in making international payments. The purpose of this acquisition is to further expand our corporate payments footprint. |
• | On September 26, 2017, we acquired a fuel card provider in Russia. |
• | On October 13, 2017, we completed the acquisition of CLS, a small lodging business, in the United States. |
(Unaudited) | Three Months Ended June 30, 20181 | % of total revenue | Three Months Ended September 30, 20172 | % of total revenue | Increase (decrease) | % Change | |||||||||||||||
Revenues, net: | |||||||||||||||||||||
North America | $ | 412.8 | 66.6 | % | $ | 368.0 | 63.7 | % | $ | 44.8 | 12.2 | % | |||||||||
International | 206.8 | 33.4 | % | 209.9 | 36.3 | % | (3.1 | ) | (1.5 | )% | |||||||||||
Total revenues, net | 619.6 | 100.0 | % | 577.9 | 100.0 | % | 41.7 | 7.2 | % | ||||||||||||
Consolidated operating expenses: | |||||||||||||||||||||
Merchant commissions | — | — | % | 27.7 | 4.8 | % | (27.7 | ) | (100.0 | )% | |||||||||||
Processing | 128.4 | 20.7 | % | 111.3 | 19.3 | % | 17.1 | 15.4 | % | ||||||||||||
Selling | 44.8 | 7.2 | % | 45.1 | 7.8 | % | (0.3 | ) | (0.6 | )% | |||||||||||
General and administrative | 98.0 | 15.8 | % | 92.1 | 15.9 | % | 6.0 | 6.5 | % | ||||||||||||
Depreciation and amortization | 67.3 | 10.9 | % | 69.2 | 12.0 | % | (1.9 | ) | (2.7 | )% | |||||||||||
Operating income | 281.1 | 45.4 | % | 232.6 | 40.3 | % | 48.5 | 20.8 | % | ||||||||||||
Investment loss | 7.1 | 1.2 | % | 47.8 | 8.3 | % | (40.6 | ) | (85.0 | )% | |||||||||||
Other expense (income), net | 0.3 | — | % | (175.3 | ) | (30.3 | )% | (175.6 | ) | NM | |||||||||||
Interest expense, net | 36.1 | 5.8 | % | 29.3 | 5.1 | % | 6.7 | 22.9 | % | ||||||||||||
Loss on extinguishment of debt | — | — | % | 3.3 | 0.6 | % | (3.3 | ) | (100.0 | )% | |||||||||||
Provision for income taxes | 79.9 | 12.9 | % | 124.7 | 21.6 | % | (44.8 | ) | (35.9 | )% | |||||||||||
Net income | $ | 157.7 | 25.5 | % | $ | 202.8 | 35.1 | % | $ | (45.1 | ) | (22.3 | )% | ||||||||
Operating income for segments: | |||||||||||||||||||||
North America | $ | 177.8 | $ | 138.5 | $ | 39.3 | 28.4 | % | |||||||||||||
International | 103.3 | 94.2 | 9.2 | 9.7 | % | ||||||||||||||||
Operating income | $ | 281.1 | $ | 232.6 | $ | 48.5 | 20.8 | % | |||||||||||||
Operating margin for segments: | |||||||||||||||||||||
North America | 43.1 | % | 37.6 | % | 5.4 | % | |||||||||||||||
International | 50.0 | % | 44.9 | % | 5.1 | % | |||||||||||||||
Total | 45.4 | % | 40.3 | % | 5.1 | % |
• | Organic growth of approximately 11% on a constant fuel price, fuel spread margin, foreign currency and acquisition and disposition basis, driven by increases in both volume and revenue per transaction in certain of our payment programs. Organic revenue growth has been calculated assuming ASC 606 was implemented on January 1, 2017, in order to calculate organic growth using comparable revenue results in each period. |
• | The impact of acquisitions during 2017, which contributed approximately $20 million in additional revenue. |
• | Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a negative impact on our consolidated revenue for the three months ended September 30, 2018 over the comparable period in 2017 of approximately $9 million. Foreign exchange rates had an unfavorable impact on consolidated revenues in the three months ended September 30, 2018 over the comparable period in 2017 of approximately $26 million, primarily due to unfavorable changes in foreign exchange rates mostly in Brazil, partially offset by the favorable impact of higher fuel prices of approximately $14 million and favorable fuel spread margins of approximately $3 million, in the three months ended September 30, 2018 over the comparable period in 2017. |
• | Organic growth of approximately 11%, on a constant fuel price, fuel spread margin and acquisition and disposition basis, driven by increases in both volume and revenue per transaction in certain of our payment programs. Organic revenue growth has been calculated assuming ASC 606 was implemented on January 1, 2017, in order to calculate organic growth using comparable revenue results in each period. |
• | The impact of our Cambridge and CLS acquisitions during 2017, which contributed approximately $18 million in additional revenue. |
• | Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a positive impact on our North America segment revenue in three months ended September 30, 2018 over the comparable period in 2017 of approximately $14 million, primarily due to the favorable impact of higher fuel prices of approximately $11 million and favorable fuel spread margins of approximately $3 million. |
• | Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a negative impact on our International segment revenue for the three months ended September 30, 2018 over the comparable period in 2017 of approximately $23 million. Unfavorable foreign exchange rates negatively impacted consolidated revenues by approximately $25 million primarily due to unfavorable changes in foreign exchange rates mostly in Brazil, partially offset by the favorable impact of higher fuel prices on consolidated revenues of approximately $3 million. |
• | Organic growth of approximately 11% on a constant fuel price, fuel spread margin and acquisition basis, driven by increases in both volume and revenue per transaction in certain of our payment programs. Organic revenue growth has been calculated assuming ASC 606 was implemented in January 2017 in order to calculate organic growth using a consistent revenue standard in both periods. |
• | The impact of a small fuel card acquisition during 2017, which contributed approximately $2 million in additional revenue. |
Three Months Ended September 30, | ||||||||||||||
Revenue, net by Geography* | 2018¹ | 2017 | ||||||||||||
(Unaudited) | Revenues, net | % of total revenues, net | Revenues, net | % of total revenues, net | ||||||||||
United States | $ | 391 | 63 | % | $ | 358 | 62 | % | ||||||
Brazil | 92 | 15 | % | 101 | 17 | % | ||||||||
United Kingdom | 63 | 10 | % | 61 | 11 | % | ||||||||
Other | 74 | 12 | % | 58 | 10 | % | ||||||||
Consolidated revenues, net | $ | 620 | 100 | % | $ | 578 | 100 | % |
Three Months Ended September 30, | ||||||||||||||
Revenue, net by Product Category* | 2018¹ | 2017 | ||||||||||||
(Unaudited) | Revenues, net | % of total revenues, net | Revenues, net | % of total revenues, net | ||||||||||
Fuel | $ | 276 | 45 | % | $ | 276 | 48 | % | ||||||
Corporate Payments | 105 | 17 | % | 72 | 12 | % | ||||||||
Tolls | 78 | 13 | % | 83 | 14 | % | ||||||||
Lodging | 48 | 8 | % | 33 | 6 | % | ||||||||
Gift | 57 | 9 | % | 55 | 9 | % | ||||||||
Other | 56 | 9 | % | 59 | 10 | % | ||||||||
Consolidated revenues, net | $ | 620 | 100 | % | $ | 578 | 100 | % |
Major Sources of Revenue, net* | Three Months Ended September 30, | |||||||||||||
(Unaudited) | 2018¹ | % | 2017 | % | ||||||||||
Processing and Program Revenue2 | $ | 322 | 52 | % | $ | 288 | 50 | % | ||||||
Late Fees and Finance Charges3 | 38 | 6 | % | 34 | 6 | % | ||||||||
Miscellaneous Fees4 | 39 | 6 | % | 32 | 5 | % | ||||||||
Discount Revenue (Fuel)5 | 87 | 14 | % | 77 | 13 | % | ||||||||
Discount Revenue (NonFuel)6 | 51 | 8 | % | 45 | 8 | % | ||||||||
Tied to Fuel-Price Spreads7 | 31 | 5 | % | 53 | 9 | % | ||||||||
Merchant Program Revenue8 | 53 | 9 | % | 49 | 8 | % | ||||||||
Consolidated revenues, net | $ | 620 | 100 | % | $ | 578 | 100 | % |
1 Reflects the impact of the Company's adoption of ASC 606 and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effect of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its annual report on Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect the impact of ASC 606. |
2 Includes revenue from customers based on accounts, cards, devices, transactions, load amounts and/or purchase amounts, etc. for participation in our various fleet and workforce related programs, as well as revenue from partners (e.g., major retailers, leasing companies, oil companies, petroleum marketers, etc.) for processing and network management services. Primarily represents revenue from North American trucking, lodging, prepaid benefits, telematics, gift cards and toll related businesses. |
3 Fees for late payment and interest charges for carrying a balance charged to a customer. |
4 Non-standard fees charged to customers based on customer behavior or optional participation, primarily including high credit risk surcharges, over credit limit charges, minimum processing fees, printing and mailing fees, etc. |
5 Interchange revenue directly influenced by the absolute price of fuel and other interchange related to fuel products. |
6 Interchange revenue related to nonfuel products. |
7 Revenue derived from the difference between the price charged to a fleet customer for a transaction and the price paid to the merchant for the same transaction. |
8 Revenue derived primarily from the sale of equipment, software and related maintenance to merchants. |
* We may not be able to precisely calculate revenue by source, as certain estimates were made in these allocations. Columns may not calculate due to rounding. |
Three Months Ended September 30, | ||||||
(Unaudited) | 2018 | 2017 | ||||
Term loan A | 3.59 | % | 2.98 | % | ||
Term loan B | 4.09 | % | 3.32 | % | ||
Domestic Revolver A | 3.59 | % | 2.99 | % | ||
Foreign Revolver A | 2.13 | % | 2.00 | % | ||
Foreign swing line | 2.12 | % | 1.97 | % |
(Unaudited) | Nine Months Ended September 30, 20181 | % of total revenue | Nine Months Ended September 30, 20172 | % of total revenue | Increase (decrease) | % Change | |||||||||||||||
Revenues, net: | |||||||||||||||||||||
North America | $ | 1,148.0 | 64.1 | % | $ | 1,040.9 | 63.5 | % | $ | 107.1 | 10.3 | % | |||||||||
International | 642.0 | 35.9 | % | 598.6 | 36.5 | % | 43.4 | 7.3 | % | ||||||||||||
Total revenues, net | 1,790.1 | 100.0 | % | 1,639.5 | 100.0 | % | 150.5 | 9.2 | % | ||||||||||||
Consolidated operating expenses: | |||||||||||||||||||||
Merchant commissions | — | — | % | 82.7 | 5.0 | % | (82.7 | ) | (100.0 | )% | |||||||||||
Processing | 356.1 | 19.9 | % | 316.4 | 19.3 | % | 39.7 | 12.5 | % | ||||||||||||
Selling | 135.9 | 7.6 | % | 122.9 | 7.5 | % | 13.1 | 10.6 | % | ||||||||||||
General and administrative | 284.7 | 15.9 | % | 275.1 | 16.8 | % | 9.6 | 3.5 | % | ||||||||||||
Depreciation and amortization | 207.4 | 11.6 | % | 198.7 | 12.1 | % | 8.6 | 4.4 | % | ||||||||||||
Operating income | 806.0 | 45.0 | % | 643.7 | 39.3 | % | 162.2 | 25.2 | % | ||||||||||||
Investment loss | 7.1 | 0.4 | % | 52.5 | 3.2 | % | (45.4 | ) | (86.4 | )% | |||||||||||
Other expense (income), net | 0.5 | — | % | (173.6 | ) | (10.6 | )% | 174.1 | NM | ||||||||||||
Interest expense, net | 100.3 | 5.6 | % | 76.3 | 4.7 | % | 24.0 | 31.4 | % | ||||||||||||
Loss on extinguishment of debt | — | — | % | 3.3 | 0.2 | % | (3.3 | ) | (100.0 | )% | |||||||||||
Provision for income taxes | 188.6 | 10.5 | % | 227.8 | 13.9 | % | (39.2 | ) | (17.2 | )% | |||||||||||
Net income | $ | 509.5 | 28.5 | % | $ | 457.5 | 27.9 | % | $ | 52.0 | 11.4 | % | |||||||||
Operating income for segments: | |||||||||||||||||||||
North America | $ | 495.1 | $ | 394.4 | $ | 100.7 | 25.5 | % | |||||||||||||
International | 310.9 | 249.4 | 61.5 | 24.7 | % | ||||||||||||||||
Operating income | $ | 806.0 | $ | 643.7 | $ | 162.2 | 25.2 | % | |||||||||||||
Operating margin for segments: | |||||||||||||||||||||
North America | 43.1 | % | 37.9 | % | 5.2 | % | |||||||||||||||
International | 48.4 | % | 41.7 | % | 6.8 | % | |||||||||||||||
Total | 45.0 | % | 39.3 | % | 5.8 | % |
• | Organic growth of approximately 10% on a constant fuel price, fuel spread margin, foreign currency and acquisition, and disposition basis, driven by increases in both volume and revenue per transaction in certain of our payment programs. Organic revenue growth has been calculated assuming ASC 606 was implemented on January 1, 2017, in order to calculate organic growth using comparable revenue results in each period. |
• | The impact of acquisitions during 2017, which contributed approximately $96 million in additional revenue. |
• | Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a favorable impact on our consolidated revenue for the nine months ended September 30, 2018 over the comparable period in 2017 of approximately $7 million. We believe the higher fuel priced, had a favorable impact on consolidated revenues in the nine months ended September 30, 2018 over the comparable period in 2017 of approximately $36 million. Conversely, foreign exchange rates and fuel spread margins had an unfavorable impact on consolidated revenues in the nine months ended September 30, 2018 compared to the comparable period in 2017 of approximately $25 million and $4 million, respectively. |
• | Organic growth of approximately 9%, on a constant fuel price, fuel spread margin and acquisition and disposition basis, driven by increases in both volume and revenue per transaction in certain of our payment programs. Organic revenue growth has been calculated assuming ASC 606 was implemented on January 1, 2017, in order to calculate organic growth using comparable revenue results in each period. |
• | The impact of our Cambridge and CLS acquisitions during 2017, which contributed approximately $90 million in additional revenue. |
• | Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a positive impact on our North America segment revenue in the nine month period ended September 30, 2018 over the comparable period in 2017 of approximately $27 million, primarily due to the favorable impact of higher fuel prices of approximately $31 million, partially offset by lower fuel spread margins of approximately $4 million. |
• | Organic growth of approximately 12% on a constant fuel price, fuel spread margin and acquisition basis, driven by increases in both volume and revenue per transaction in certain of our payment programs. Organic revenue growth has been calculated assuming ASC 606 was implemented in January 2017 in order to calculate organic growth using a consistent revenue standard in both periods. |
• | Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a negative impact on our International segment revenue for the nine months ended September 30, 2018 over the comparable period in 2017 of approximately $20 million. Changes in foreign exchange rates had an unfavorable impact on consolidated revenues of approximately $25 million, partially offset by the favorable impact of higher fuel prices of approximately $5 million. |
• | The impact of a small fuel card acquisition during 2017, which contributed approximately $7 million in additional revenue. |
Nine Months Ended September 30, | ||||||||||||||
Revenue, net by Geography* | 2018¹ | 2017 | ||||||||||||
(Unaudited) | Revenues, net | % of total revenues, net | Revenues, net | % of total revenues, net | ||||||||||
United States | $ | 1,082 | 60 | % | $ | 1,031 | 63 | % | ||||||
Brazil | 296 | 17 | % | 287 | 17 | % | ||||||||
United Kingdom | 192 | 11 | % | 174 | 11 | % | ||||||||
Other | 220 | 12 | % | 148 | 9 | % | ||||||||
Consolidated revenues, net | $ | 1,790 | 100 | % | $ | 1,640 | 100 | % |
Nine Months Ended September 30, | ||||||||||||||
Revenue, net by Product Category* | 2018¹ | 2017 | ||||||||||||
(Unaudited) | Revenues, net | % of total revenues, net | Revenues, net | % of total revenues, net | ||||||||||
Fuel cards | $ | 805 | 45 | % | $ | 815 | 50 | % | ||||||
Corporate Payments | 300 | 17 | % | 150 | 9 | % | ||||||||
Tolls | 250 | 14 | % | 236 | 14 | % | ||||||||
Lodging | 132 | 7 | % | 86 | 5 | % | ||||||||
Gift | 139 | 8 | % | 144 | 9 | % | ||||||||
Other | 164 | 9 | % | 209 | 13 | % | ||||||||
Consolidated revenues, net | $ | 1,790 | 100 | % | $ | 1,640 | 100 | % |
Major Sources of Revenue, net* | Nine Months Ended September 30, | |||||||||||||
(Unaudited) | 2018¹ | % of total revenues, net | 2017 | % of total revenues, net | ||||||||||
Processing and Program Revenue2 | $ | 932 | 52 | % | $ | 781 | 48 | % | ||||||
Late Fees and Finance Charges3 | 109 | 6 | % | 105 | 6 | % | ||||||||
Miscellaneous Fees4 | 113 | 6 | % | 97 | 6 | % | ||||||||
Discount Revenue (Fuel)5 | 257 | 14 | % | 223 | 14 | % | ||||||||
Discount Revenue (NonFuel)6 | 139 | 8 | % | 130 | 8 | % | ||||||||
Tied to Fuel-Price Spreads7 | 86 | 5 | % | 165 | 10 | % | ||||||||
Merchant Program Revenue8 | 154 | 9 | % | 139 | 8 | % | ||||||||
Consolidated revenues, net | $ | 1,790 | 100 | % | $ | 1,640 | 100 | % |
1 Reflects the impact of the Company's adoption of ASC 606 and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effect of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its annual report on Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect the impact of ASC 606. |
2 Includes revenue from customers based on accounts, cards, devices, transactions, load amounts and/or purchase amounts, etc. for participation in our various fleet and workforce related programs, as well as revenue from partners (e.g., major retailers, leasing companies, oil companies, petroleum marketers, etc.) for processing and network management services. Primarily represents revenue from North American trucking, lodging, prepaid benefits, telematics, gift cards and toll related businesses. |
3 Fees for late payment and interest charges for carrying a balance charged to a customer. |
4 Non-standard fees charged to customers based on customer behavior or optional participation, primarily including high credit risk surcharges, over credit limit charges, minimum processing fees, printing and mailing fees, etc. |
5 Interchange revenue directly influenced by the absolute price of fuel and other interchange related to fuel products. |
6 Interchange revenue related to nonfuel products. |
7 Revenue derived from the difference between the price charged to a fleet customer for a transaction and the price paid to the merchant for the same transaction. |
8 Revenue derived primarily from the sale of equipment, software and related maintenance to merchants. |
* We may not be able to precisely calculate revenue by source, as certain estimates were made in these allocations. Columns may not calculate due to rounding. |
Nine Months Ended September 30, | ||||||
(Unaudited) | 2018 | 2017 | ||||
Term loan A | 3.43 | % | 2.74 | % | ||
Term loan B | 3.87 | % | 3.28 | % | ||
Domestic Revolver A | 3.42 | % | 2.78 | % | ||
Foreign Revolver A | 2.10 | % | 2.01 | % | ||
Foreign swing line | 2.08 | % | 1.97 | % |
Nine Months Ended September 30, | ||||||||
(Unaudited) | 2018 | 2017 | ||||||
Net cash provided by operating activities | $ | 555.4 | $ | 431.6 | ||||
Net cash used in investing activities | (71.3 | ) | (341.6 | ) | ||||
Net cash (used in) provided by financing activities | (356.3 | ) | 250.1 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(Unaudited) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 157,694 | $ | 202,823 | $ | 509,483 | $ | 457,503 | ||||||||
Stock based compensation | 20,702 | 24,654 | 54,207 | 68,897 | ||||||||||||
Amortization of intangible assets, premium on receivables, deferred financing costs and discounts | 55,482 | 60,229 | 173,239 | 177,387 | ||||||||||||
Impairment of investment | 7,147 | 44,600 | 7,147 | 44,600 | ||||||||||||
Net gain on disposition of business | — | (109,205 | ) | — | (109,205 | ) | ||||||||||
Loss on extinguishment of debt | — | 3,296 | — | 3,296 | ||||||||||||
Non recurring loss due to merger of entities | — | 2,028 | — | 2,028 | ||||||||||||
Restructuring costs | 481 | — | 3,917 | — | ||||||||||||
Unauthorized access impact | 322 | — | 2,065 | — | ||||||||||||
Total pre-tax adjustments | 84,134 | 25,602 | 240,575 | 187,003 | ||||||||||||
Income tax impact of pre-tax adjustments at the effective tax rate1 | (17,977 | ) | (25,656 | ) | (54,904 | ) | (69,711 | ) | ||||||||
Impact of tax reform | 22,731 | — | 22,731 | — | ||||||||||||
Adjusted net income | $ | 246,582 | $ | 202,769 | $ | 717,885 | $ | 574,795 | ||||||||
Adjusted net income per diluted share | $ | 2.68 | $ | 2.18 | $ | 7.75 | $ | 6.12 | ||||||||
Diluted shares | 92,081 | 93,001 | 92,671 | 93,923 |
1Excludes the results of the Company's investments on our effective tax rate, as results from our investments are reported within the consolidated statements of income on a post-tax basis and no tax-over-book outside basis differences related to our investments reversed during 2017. Excludes impact of tax reform adjustments during the period included in our effective tax rate. Also excludes the net gain realized upon our disposition of Nextraq, representing a pretax gain of $175.0 million and tax on gain of $65.8 million. The tax on the gain is included in "Net gain on disposition of business". |
Revenue | Transactions | |||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||
2018* | 2017* | 2018* | 2017* | |||||||||||
FUEL | ||||||||||||||
Pro forma and macro adjusted | $ | 263.8 | $ | 250.5 | 122.9 | 121.1 | ||||||||
Impact of acquisitions/dispositions | — | (2.3 | ) | — | (1.8 | ) | ||||||||
Impact of fuel prices/spread | 16.8 | — | — | — | ||||||||||
Impact of foreign exchange rates | (4.6 | ) | — | — | — | |||||||||
Impact of adoption of ASC 606 | — | 28.0 | — | — | ||||||||||
As reported | $ | 276.0 | $ | 276.2 | 122.9 | 119.3 | ||||||||
CORPORATE PAYMENTS | ||||||||||||||
Pro forma and macro adjusted | $ | 106.2 | $ | 83.2 | 13.1 | 11.1 | ||||||||
Impact of acquisitions/dispositions | — | (11.5 | ) | — | (0.2 | ) | ||||||||
Impact of fuel prices/spread | 0.2 | — | — | — | ||||||||||
Impact of foreign exchange rates | (0.9 | ) | — | — | — | |||||||||
Impact of adoption of ASC 606 | — | 0.5 | — | — | ||||||||||
As reported | $ | 105.5 | $ | 72.2 | 13.1 | 10.9 | ||||||||
TOLLS | ||||||||||||||
Pro forma and macro adjusted | $ | 97.0 | $ | 82.9 | 221.9 | 226.1 | ||||||||
Impact of acquisitions/dispositions | — | — | — | — | ||||||||||
Impact of fuel prices/spread | — | — | — | — | ||||||||||
Impact of foreign exchange rates | (19.2 | ) | — | — | — | |||||||||
Impact of adoption of ASC 606 | — | — | — | — | ||||||||||
As reported | $ | 77.8 | $ | 82.9 | 221.9 | 226.1 | ||||||||
LODGING | ||||||||||||||
Pro forma and macro adjusted | $ | 48.0 | $ | 39.6 | 4.5 | 4.6 | ||||||||
Impact of acquisitions/dispositions | — | (6.4 | ) | — | (0.5 | ) | ||||||||
Impact of fuel prices/spread | — | — | — | — | ||||||||||
Impact of foreign exchange rates | — | — | — | — | ||||||||||
Impact of adoption of ASC 606 | — | — | — | — | ||||||||||
As reported | $ | 48.0 | $ | 33.2 | 4.5 | 4.1 | ||||||||
GIFT | ||||||||||||||
Pro forma and macro adjusted | $ | 56.7 | $ | 54.8 | 277.6 | 294.1 | ||||||||
Impact of acquisitions/dispositions | — | — | — | — | ||||||||||
Impact of fuel prices/spread | — | — | — | — | ||||||||||
Impact of foreign exchange rates | — | — | — | — | ||||||||||
Impact of adoption of ASC 606 | — | — | — | — | ||||||||||
As reported | $ | 56.7 | $ | 54.8 | 277.6 | 294.1 | ||||||||
OTHER1 | ||||||||||||||
Pro forma and macro adjusted | $ | 58.1 | $ | 55.8 | 18.6 | 19.7 | ||||||||
Impact of acquisitions/dispositions | — | 2.2 | — | 0.1 | ||||||||||
Impact of fuel prices/spread | — | — | — | — | ||||||||||
Impact of foreign exchange rates | (2.4 | ) | — | — | — | |||||||||
Impact of adoption of ASC 606 | — | 0.5 | — | — | ||||||||||
As reported | $ | 55.7 | $ | 58.5 | 18.6 | 19.7 | ||||||||
FLEETCOR CONSOLIDATED REVENUES | ||||||||||||||
Pro forma and macro adjusted | $ | 629.8 | $ | 566.8 | 658.6 | 676.7 | ||||||||
Impact of acquisitions/dispositions | — | (18.0 | ) | — | (2.4 | ) | ||||||||
Impact of fuel prices/spread | 17.0 | — | — | — | ||||||||||
Impact of foreign exchange rates | (27.2 | ) | — | — | — | |||||||||
Impact of adoption of ASC 606 | — | 29.0 | — | — | ||||||||||
As reported | $ | 619.6 | $ | 577.9 | 658.6 | 674.3 | ||||||||
* Columns may not calculate due to rounding. | ||||||||||||||
1Other includes telematics, maintenance, and transportation related businesses. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Exhibit No. | ||
Acquisition agreement to acquire Serviços e Tecnologia de Pagamentos S.A. (incorporated by reference to Exhibit 2.1 to the Registrant's Form 8-K, File No. 001-35004, filed with the Securities and Exchange Commission ("SEC") on March 18, 2016) | ||
Amended and Restated Certificate of Incorporation of FleetCor Technologies, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K, File No. 001-35004, filed with the SEC on March 25, 2011) | ||
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of FleetCor Technologies, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, File No. 001-35004, file with the SEC on June 8, 2018) | ||
Amended and Restated Bylaws of FleetCor Technologies, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 8-K, File No. 001-35004, filed with the SEC on January 29, 2018) | ||
Form of Stock Certificate for Common Stock (incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1, File No. 333-166092, filed with the SEC on June 29, 2010) | ||
10.2* | Fourth Amendment to Credit Agreement, dated August 30, 2018, among FleetCor Technologies Operating Company, LLC, FleetCor Technologies Operating Company, LLC, FleetCor Technologies, Inc., the designated borrowers party thereto, Cambridge Mercantile Corp. (U.S.A.), the other guarantors party thereto, Bank of America, N.A., as administrative agent, swing line lender and l/c issuer, and the other lenders party thereto | |
10.3* | Fourth Amendment to Fifth Amended and Restated Receivables Purchase Agreement, dated August 30, 2018, by and among FleetCor Funding LLC, FleetCor Technologies Operating Company, LLC, PNC Bank, National Association as administrator for a group of purchasers and purchaser agents, and certain other parties thereto | |
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended | ||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended | ||
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2001 | ||
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2001 | ||
101 | The following financial information for the Registrant formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Income, (iii) the Unaudited Consolidated Statements of Comprehensive Income; (iv) the Unaudited Consolidated Statements of Cash Flows and (v) the Notes to Unaudited Consolidated Financial Statements |
FleetCor Technologies, Inc. | ||||
(Registrant) | ||||
Signature | Title | |||
/s/ Ronald F. Clarke | President, Chief Executive Officer and Chairman of the Board of Directors (Duly Authorized Officer and Principal Executive Officer) | |||
Ronald F. Clarke | ||||
/s/ Eric R. Dey | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |||
Eric R. Dey |
(i) | FLEETCOR FUNDING LLC, as Seller (the “Seller”); |
(ii) | FLEETCOR TECHNOLOGIES OPERATING COMPANY, LLC, as Servicer (the “Servicer”); |
(iii) | PNC BANK, NATIONAL ASSOCIATION (“PNC”), as a Committed Purchaser, as the sole Swingline Purchaser and as the Purchaser Agent for its Purchaser Group; |
(iv) | CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK (“CACIB”), as a Committed Purchaser and as the Purchaser Agent for its and Atlantic’s Purchaser Group; |
(v) | ATLANTIC ASSET SECURITIZATION LLC (“Atlantic”), as a Conduit Purchaser for CACIB’s Purchaser Group; |
(vi) | WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells”), as a Committed Purchaser and as the Purchaser Agent for its Purchaser Group; |
(vii) | REGIONS BANK (“Regions”), as a Committed Purchaser and as the Purchaser Agent for its Purchaser Group; |
(viii) | MUFG BANK, LTD. (“MUFG”), as a Committed Purchaser and as the Purchaser Agent for its and Victory’s Purchaser Group; |
(ix) | VICTORY RECEIVABLES CORPORATION (“Victory”), as a Conduit Purchaser for MUFG’s Purchaser Group; |
(x) | SUMITOMO MITSUI BANKING CORPORATION (“SMBC”), as a Committed Purchaser; |
(xi) | MANHATTAN ASSET FUNDING LLC (“Manhattan”), as a Conduit Purchaser for SMBC’s Purchaser Group; |
(xii) | SMBC NIKKO SECURITIES AMERICA, INC. (“SMBC Nikko”), as the Purchaser Agent for SMBC’s and Manhattan’s Purchaser Group; |
(xiii) | MIZUHO BANK, LTD. (“Mizuho”), as a Committed Purchaser; and |
(xiv) | PNC BANK, NATIONAL ASSOCIATION, as Administrator |
Purchaser Group of PNC Bank, National Association | ||
Party | Capacity | Commitment |
PNC Bank, National Association | Committed Purchaser | $380,000,000 |
PNC Bank, National Association | Purchaser Agent | N/A |
Purchaser Group of Wells Fargo Bank, National Association | ||
Party | Capacity | Commitment |
Wells Fargo Bank, National Association | Committed Purchaser | $190,000,000 |
Wells Fargo Bank, National Association | Purchaser Agent | N/A |
Purchaser Group of Credit Agricole Corporate and Investment Bank | ||
Party | Capacity | Commitment |
Atlantic Asset Securitization LLC | Conduit Purchaser | N/A |
Credit Agricole Corporate and Investment Bank | Committed Purchaser | $180,000,000 |
Credit Agricole Corporate and Investment Bank | Purchaser Agent | N/A |
Purchaser Group of Regions Bank | ||
Party | Capacity | Commitment |
Regions Bank | Committed Purchaser | $112,500,000 |
Regions Bank | Purchaser Agent | N/A |
Purchaser Group of MUFG Bank, LTD. | ||
Party | Capacity | Commitment |
Victory Receivables Corporation | Conduit Purchaser | N/A |
MUFG Bank, LTD. | Committed Purchaser | $125,000,000 |
MUFG Bank, LTD. | Purchaser Agent | N/A |
Purchaser Group of Sumitomo Mitsui Banking Corporation | ||
Party | Capacity | Commitment |
Manhattan Asset Funding Co., LLC | Conduit Purchaser | N/A |
Sumitomo Mitsui Banking Corporation | Committed Purchaser | $100,000,000 |
SMBC Nikko Securities America, Inc. | Purchaser Agent | N/A |
Purchaser Group of Mizuho Bank, Ltd. | ||
Party | Capacity | Commitment |
Mizuho Bank, Ltd. | Committed Purchaser | $112,500,000 |
Mizuho Bank, Ltd. | Purchaser Agent | N/A |
/s/ Ronald F. Clarke |
Ronald F. Clarke |
Chief Executive Officer |
/s/ Eric R. Dey |
Eric R. Dey |
Chief Financial Officer |
/s/ Ronald F. Clarke |
Ronald F. Clarke |
Chief Executive Officer |
/s/ Eric R. Dey |
Eric R. Dey |
Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Nov. 01, 2018 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | FLT | |
Entity Registrant Name | FLEETCOR TECHNOLOGIES INC | |
Entity Central Index Key | 0001175454 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 122,850,784 |
Consolidated Balance Sheets - USD ($) $ in Thousands |
Sep. 30, 2018 |
[1] | Dec. 31, 2017 |
|||||
---|---|---|---|---|---|---|---|---|
Current assets: | ||||||||
Cash and cash equivalents | $ 924,442 | $ 913,595 | [2] | |||||
Restricted cash | 264,108 | 217,275 | ||||||
Accounts and other receivables (less allowance for doubtful accounts of $52,022 at September 30, 2018 and $46,031 at December 31, 2017) | 1,811,339 | 1,420,011 | ||||||
Securitized accounts receivable—restricted for securitization investors | 931,000 | 811,000 | ||||||
Prepaid expenses and other current assets | 202,102 | 187,820 | ||||||
Total current assets | 4,132,991 | 3,549,701 | ||||||
Property and equipment, net | 184,979 | 180,057 | ||||||
Goodwill | 4,517,348 | 4,715,823 | ||||||
Other intangibles, net | 2,438,627 | 2,724,957 | ||||||
Investments | 33,032 | 32,859 | ||||||
Other assets | 143,913 | 114,962 | ||||||
Total assets | 11,450,890 | 11,318,359 | ||||||
Current liabilities: | ||||||||
Accounts payable | 1,616,949 | 1,437,314 | ||||||
Accrued expenses | 252,069 | 238,472 | ||||||
Customer deposits | 825,371 | 732,171 | ||||||
Securitization facility | 931,000 | 811,000 | ||||||
Current portion of notes payable and lines of credit | 768,548 | 805,512 | ||||||
Other current liabilities | 90,531 | 71,033 | ||||||
Total current liabilities | 4,484,468 | 4,095,502 | ||||||
Notes payable and other obligations, less current portion | 2,773,378 | 2,902,104 | ||||||
Deferred income taxes | 506,310 | 518,912 | ||||||
Other noncurrent liabilities | 124,486 | 125,319 | ||||||
Total noncurrent liabilities | 3,404,174 | 3,546,335 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value; 475,000,000 shares authorized; 122,823,669 shares issued and 88,648,486 shares outstanding at September 30, 2018; and 122,083,059 shares issued and 89,803,982 shares outstanding at December 31, 2017 | 123 | 122 | ||||||
Additional paid-in capital | 2,316,753 | 2,214,224 | ||||||
Retained earnings | 3,515,657 | 2,958,921 | ||||||
Accumulated other comprehensive loss | (944,746) | (551,857) | ||||||
Less treasury stock (34,175,183 shares at September 30, 2018 and 32,279,077 shares at December 31, 2017) | (1,325,539) | (944,888) | ||||||
Total stockholders’ equity | 3,562,248 | 3,676,522 | ||||||
Total liabilities and stockholders’ equity | $ 11,450,890 | $ 11,318,359 | ||||||
|
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 52,022 | $ 46,031 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 475,000,000 | 475,000,000 |
Common stock, shares issued (in shares) | 122,823,669 | 122,083,059 |
Common stock, shares outstanding (in shares) | 88,648,486 | 89,803,982 |
Treasury stock, shares (in shares) | 34,175,183 | 32,279,077 |
Unaudited Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
||||||||
Income Statement [Abstract] | |||||||||||
Revenues, net | $ 619,586 | [1] | $ 577,877 | $ 1,790,070 | [1] | $ 1,639,547 | |||||
Expenses: | |||||||||||
Merchant commissions | 0 | [1] | 27,687 | 0 | [1] | 82,690 | |||||
Processing | 128,400 | [1] | 111,283 | 356,086 | [1] | 316,429 | |||||
Selling | 44,806 | [1] | 45,060 | 135,926 | [1] | 122,854 | |||||
General and administrative | 98,023 | [1] | 92,054 | 284,718 | [1] | 275,095 | |||||
Depreciation and amortization | 67,267 | [1] | 69,156 | 207,379 | [1] | 198,731 | |||||
Operating income | 281,090 | [1] | 232,637 | 805,961 | [1] | 643,748 | |||||
Investment loss | 7,147 | [1] | 47,766 | 7,147 | [1],[2] | 52,497 | [2] | ||||
Other expense (income), net | 303 | [1] | (175,271) | 465 | [1] | (173,626) | |||||
Interest expense, net | 36,072 | [1] | 29,344 | 100,287 | [1] | 76,322 | |||||
Loss on extinguishment of debt | 0 | (3,296) | 0 | (3,296) | |||||||
Total other expense (income) | 43,522 | [1] | (94,865) | 107,899 | [1] | (41,511) | |||||
Income before income taxes | 237,568 | [1] | 327,502 | 698,062 | [1] | 685,259 | |||||
Provision for income taxes | 79,874 | [1] | 124,679 | 188,579 | [1] | 227,756 | |||||
Net income | $ 157,694 | [1] | $ 202,823 | $ 509,483 | [1],[2] | $ 457,503 | [2] | ||||
Earnings per share: | |||||||||||
Basic earnings per share (in dollars per share) | $ 1.78 | [1] | $ 2.23 | $ 5.72 | [1] | $ 4.99 | |||||
Diluted earnings per share (in dollars per share) | $ 1.71 | [1] | $ 2.18 | $ 5.50 | [1] | $ 4.87 | |||||
Weighted average shares outstanding: | |||||||||||
Basic weighted average shares outstanding (in shares) | 88,456 | [1] | 90,751 | 89,126 | [1] | 91,619 | |||||
Diluted weighted average shares outstanding (in shares) | 92,081 | [1] | 93,001 | 92,671 | [1] | 93,923 | |||||
|
Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
||||||||
Statement of Comprehensive Income [Abstract] | |||||||||||
Net income | $ 157,694 | [1] | $ 202,823 | $ 509,483 | [1],[2] | $ 457,503 | [2] | ||||
Other comprehensive (loss) income: | |||||||||||
Foreign currency translation (losses) gains, net of tax | (74,058) | 112,301 | (392,889) | 168,655 | |||||||
Reclassification of foreign currency translation loss to investment, net of tax | 0 | 31,381 | 0 | 31,381 | |||||||
Total other comprehensive (loss) income | (74,058) | 143,682 | (392,889) | 200,036 | |||||||
Total comprehensive income | $ 83,636 | $ 346,505 | $ 116,594 | $ 657,539 | |||||||
|
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|||||||||
Operating activities | |||||||||||||
Net income | $ 157,694 | [1] | $ 202,823 | $ 509,483 | [1],[2] | $ 457,503 | [2] | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
Depreciation | [2] | 38,174 | 35,096 | ||||||||||
Stock-based compensation | [2] | 54,207 | 68,897 | ||||||||||
Provision for losses on accounts receivable | [2] | 43,520 | 35,949 | ||||||||||
Amortization of deferred financing costs and discounts | [2] | 4,035 | 5,411 | ||||||||||
Amortization of intangible assets | [2] | 165,002 | 158,897 | ||||||||||
Amortization of premium on receivables | [2] | 4,202 | 4,738 | ||||||||||
Loss on extinguishment of debt | 0 | 3,296 | 0 | 3,296 | |||||||||
Deferred income taxes | [2] | (6,334) | (38,092) | ||||||||||
Investment loss | 7,147 | [1] | 47,766 | 7,147 | [1],[2] | 52,497 | [2] | ||||||
Gain on disposition of business | 0 | (174,984) | |||||||||||
Other non-cash operating income | [2] | (140) | (49) | ||||||||||
Changes in operating assets and liabilities (net of acquisitions): | |||||||||||||
Accounts and other receivables | [2] | (640,859) | (440,011) | ||||||||||
Prepaid expenses and other current assets | [2] | (19,618) | (86,648) | ||||||||||
Other assets | [2] | (19,922) | (15,378) | ||||||||||
Accounts payable, accrued expenses and customer deposits | [2] | 416,483 | 364,473 | ||||||||||
Net cash provided by operating activities | [2] | 555,380 | 431,595 | ||||||||||
Investing activities | |||||||||||||
Acquisitions, net of cash acquired | [2] | (3,799) | (602,298) | ||||||||||
Purchases of property and equipment | (21,698) | (16,859) | (56,312) | [2] | (49,459) | [2] | |||||||
Proceeds from disposal of a business | 0 | 316,501 | |||||||||||
Other | (11,192) | [2] | (6,327) | [2] | $ (39,000) | ||||||||
Net cash used in investing activities | [2] | (71,303) | (341,583) | ||||||||||
Financing activities | |||||||||||||
Proceeds from issuance of common stock | [2] | 48,322 | 20,192 | ||||||||||
Repurchase of common stock | [2] | (380,651) | (402,392) | ||||||||||
Borrowings on securitization facility, net | [2] | 120,000 | 203,000 | ||||||||||
Deferred financing costs paid and debt discount | (166) | (11,230) | |||||||||||
Proceeds from issuance of notes payable | 0 | 780,656 | |||||||||||
Principal payments on notes payable | [2] | (103,500) | (388,656) | ||||||||||
Borrowings from revolver | [2] | 834,019 | 845,000 | ||||||||||
Payments on revolver | [2] | (897,861) | (804,808) | ||||||||||
Borrowings on swing line of credit, net | [2] | 23,735 | 7,800 | ||||||||||
Other | [2] | (230) | 537 | ||||||||||
Net cash (used in) provided by financing activities | [2] | (356,332) | 250,099 | ||||||||||
Effect of foreign currency exchange rates on cash | [2] | (70,065) | 34,390 | ||||||||||
Net increase in cash and cash equivalents and restricted cash | [2] | 57,680 | 374,501 | ||||||||||
Cash and cash equivalents and restricted cash, beginning of period | [2] | 1,130,870 | 643,770 | 643,770 | |||||||||
Cash and cash equivalents and restricted cash, end of period | [2] | $ 1,188,550 | $ 1,018,271 | 1,188,550 | 1,018,271 | $ 1,130,870 | |||||||
Supplemental cash flow information | |||||||||||||
Cash paid for interest | [2] | 113,785 | 79,144 | ||||||||||
Cash paid for income taxes | [2] | $ 162,563 | $ 257,349 | ||||||||||
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation Throughout this report, the terms “our,” “we,” “us,” and the “Company” refers to FLEETCOR Technologies, Inc. and its subsidiaries. The Company prepared the accompanying interim consolidated financial statements in accordance with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”). The unaudited consolidated financial statements reflect all adjustments considered necessary for fair presentation. These adjustments consist of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. Actual results may differ from these estimates. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Foreign Currency Translation Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at the rates of exchange in effect at period-end. The related translation adjustments are made directly to accumulated other comprehensive income. Income and expenses are translated at the average monthly rates of exchange in effect during the period. Gains and losses from foreign currency transactions of these subsidiaries are included in net income. The Company recognized foreign exchange losses of $0.2 million and foreign exchange gains of $0.6 million in the three months ended September 30, 2018 and 2017, respectively, which are recorded within other (income) expense, net in the Unaudited Consolidated Statements of Income. The Company recognized foreign exchange gains of $0.2 million and foreign exchange losses of $0.2 million in the nine months ended September 30, 2018 and 2017, respectively. Derivatives The Company, through its Cambridge Global Payments ("Cambridge") subsidiary, facilitates cross-currency corporate payments by writing derivatives to customers, which are not designated as hedging instruments. The majority of this business' revenue is from exchanges of currency at spot rates, which enable customers to make cross-currency payments. In addition, the Company also writes foreign currency forward and option contracts for its customers to facilitate future payments. The duration of these derivative contracts at inception is generally less than one year. The Company aggregates its foreign exchange exposures arising from customer contracts, including forwards, options and spot exchanges of currency, and hedges (economic hedge) the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. The changes in fair value related to these contracts are recorded in the Unaudited Consolidated Statements of Income. The Company recognizes all derivatives in "prepaid expenses and other current assets" and "other current liabilities" in the accompanying Unaudited Consolidated Balance Sheets at their fair value. All cash flows associated with derivatives are included in cash flows from operating activities in the Unaudited Consolidated Statements of Cash Flows. Adoption of New Accounting Standards Impact of Adoption of ASC 606 In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)", which replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. ASU 2014-09, as amended by ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date", is effective for years beginning after December 15, 2017, including interim periods, with early adoption permitted for years beginning after December 15, 2016. Since the issuance of ASU 2014-09, the FASB has issued additional interpretive guidance, including new accounting standard updates, which clarifies certain points of the standard and modifies certain requirements. Effective January 1, 2018, we adopted ASC 606 using the modified retrospective method, for contracts that were not completed as of the date of initial application, resulting in a cumulative effect adjustment to retained earnings on January 1, 2018. For contracts that were modified before January 1, 2018, the Company has not retrospectively restated contracts for those modifications but instead reflected the aggregate effect of these modifications when identifying the satisfied and unsatisfied performance obligations, as allowed within the transition practical expedients. The cumulative impact to our retained earnings at January 1, 2018 was $30.9 million, due to the capitalization of costs to acquire contracts under the new standard, with a corresponding increase to prepaid expense and other current assets of $10.2 million, other assets of $30.3 million and deferred income taxes (liabilities) of $9.6 million. Additionally, under the new standard certain costs (e.g., merchant commissions and fees paid to credit card associations) will be presented net in revenues as the amounts represent payments to our customers that are not considered in exchange for a distinct good or service that the customer transfers to the Company. The impact to the Company's revenue, operating expenses, income from continuing operations after taxes, net income and basic and diluted earnings per share (EPS) for the three and nine months ended September 30, 2018 was as follows:
The adoption of ASC 606 did not impact our accounting for revenues derived from late fees, finance charges, and certain other charge card fees or certain of our foreign currency contracts, which continue to be accounted for under existing authoritative guidance, as discussed further below. Accounting for Leases In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. This ASU also requires disclosures to provide additional information about the amounts recorded in the financial statements. This ASU is effective for the Company for annual periods beginning after December 15, 2018 and interim periods therein. Early adoption is permitted. On July 31, 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements”, which provides (1) an optional transition method that entities can use when adopting ASC 842 and (2) a practical expedient that permits lessors to not separate nonlease components from the associated lease component if certain conditions are met. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to elect this transition method at the adoption date of January 1, 2019 and will not restate comparative periods. The Company is assessing the practical expedients available for adoption under the new standard and expects to adopt the package of practical expedients. The Company is analyzing our lease portfolio and updating accounting policies and internal controls that will be impacted by the new guidance. The Company has also selected lease accounting software to support the new reporting requirements. The Company expects to record right of use assets and liabilities for its leases in the consolidated balance sheet upon adoption. Accounting for Breakage In March 2016, the FASB issued ASU 2016-04, “Liabilities-Extinguishments of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products”, which requires entities that sell prepaid stored value products redeemable for goods, services or cash at third-party merchants to derecognize liabilities related to those products for breakage. This ASU is effective for the Company for reporting periods beginning after December 15, 2017. The ASU must be adopted using either a modified retrospective approach with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption or a full retrospective approach. The Company adopted this guidance on January 1, 2018, which did not have a material impact on the Company's results of operations, financial condition, or cash flows. Intra-Entity Transfers In October 2016, the FASB issued ASU 2016-16 “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. The Company adopted this ASU on January 1, 2018, which resulted in an increase of approximately $17.1 million to retained earnings and deferred tax assets net of valuation allowances. Cash Flow Classification In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments", which amends the guidance in ASC 230, Statement of Cash Flows. This amended guidance reduces the diversity in practice that has resulted from the lack of consistent principles related to the classification of certain cash receipts and payments in the statement of cash flows. This ASU is effective for the Company for reporting periods beginning after December 15, 2017. Entities must apply the guidance retrospectively to all periods presented but may apply it prospectively from the earliest date practicable if retrospective application would be impracticable. The Company adopted this new guidance on January 1, 2018. The adoption of this new guidance did not have a material impact on the results of operations, financial condition, or cash flows. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash", which amends the guidance in ASC 230, Statement of Cash Flows, on the classification and presentation of restricted cash in the statement of cash flows. This ASU is effective for the Company for reporting periods beginning after December 15, 2017 and changes due to adoption are applied using a retrospective transition method to each period presented. The Company adopted this new guidance on January 1, 2018, and applied retrospectively to results for 2017. The adoption of Topic 230 resulted in the statement of cash flows presenting the changes in the total of cash, cash equivalents and restricted cash. Intangibles - Goodwill and Other Impairment In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment", which eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1). The standard has tiered effective dates, starting in 2020 for calendar-year public business entities that meet the definition of an SEC filer. Early adoption is permitted for interim and annual goodwill impairment testing dates after January 1, 2017. The adoption of this ASU on January 1, 2018 did not have a material impact on the results of operations, financial condition, or cash flows. Definition of a Business In January 2017, the FASB issued ASU 2017-01, "Clarifying the Definition of a Business", which amends the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. The guidance is effective for the Company for reporting periods beginning after December 15, 2017, and interim periods within those years. The Company adopted this new guidance on January 1, 2018. The adoption of this new guidance did not have a material impact on the results of operations, financial condition, or cash flows. Accounting for Modifications to Stock-Based Compensation In May 2017, the FASB issued ASU 2017-09, "Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting", which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. The guidance is effective for the Company for reporting periods beginning after December 15, 2017, and interim periods within those years. The Company adopted this new guidance on January 1, 2018. The adoption of this new guidance did not have a material impact on the results of operations, financial condition, or cash flows. Accounting for Derivative Financial Instruments In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", which amends the hedge accounting recognition and presentation requirements in ASC 815. The FASB issued accounting guidance to better align hedge accounting with a company’s risk management activities, simplify the application of hedge accounting and improve the disclosures of hedging arrangements. The guidance is effective for the Company for reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows. Comprehensive Income Classification In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income", that gives entities the option to reclassify to retained earnings tax effects related to items that have been stranded in accumulated other comprehensive income as a result of the Tax Cuts and Jobs Act (the "Tax Act"). An entity that elects to reclassify these amounts must reclassify stranded tax effects related to the Tax Act’s change in U.S. federal tax rate for all items accounted for in other comprehensive income. These entities can also elect to reclassify other stranded effects that relate to the Tax Act but do not directly relate to the change in the federal rate. For all entities, the guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted for periods for which financial statements have not yet been issued or made available for issuance. Entities can choose whether to apply the amendments retrospectively to each period in which the effect of the Tax Act is recognized or to apply the amendments in the period of adoption. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows. Non-Employee Share-Based Payments In June 2018, the FASB issued ASU 2018-07, "Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting", that supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees. Under the new guidance, the existing employee guidance will apply to non-employee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of non-employee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for non-employee awards. The guidance is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, including in interim periods, but no earlier than an entity’s adoption of ASC 606. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows. Cloud Computing Arrangements On August 29, 2018, the FASB issued ASU 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", that provides guidance on implementation costs incurred in a cloud computing arrangement (CCA) that is a service contract. The ASU, which was released in response to a consensus reached by the EITF at its June 2018 meeting, aligns the accounting for such costs with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, the ASU amends ASC 350 to include in its scope implementation costs of a CCA that is a service contract and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized in such a CCA. The guidance is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods. The guidance should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows. Fair Value Measurement On August 28, 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement", which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC 820. The guidance is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The guidance on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other guidance should be applied retrospectively to all periods presented upon their effective date. The Company is permitted to early adopt any removed or modified disclosures upon issuance of this guidance and delay adoption of the additional disclosures until their effective date. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows. |
Revenue Recognition |
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Revenue Recognition | Revenue Recognition The Company provides payment solutions to our business, merchant, consumer and payment network customers. Our payment solutions are primarily focused on specific commercial spend categories, including fuel, lodging, tolls, and general corporate payments, as well as gift card solutions (stored value cards). The Company provides products that help businesses of all sizes control, simplify and secure payment of various domestic and cross-border payables using specialized payment products. The Company also provides other payment solutions for fleet maintenance, employee benefits and long haul transportation-related services. Payment Services The Company’s primary performance obligation for the majority of its payment solution products (fuel, lodging, tolls, corporate payments, among others) is to stand-ready to provide authorization and processing services ("payment services") for an unknown or unspecified quantity of transactions and the consideration received is contingent upon the customer’s use (e.g., number of transactions submitted and processed) of the related payment services. Accordingly, the total transaction price is variable. Payment services involve a series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. As a result, the Company allocates and recognizes variable consideration in the period it has the contractual right to invoice the customer. The Company records revenue for its payment services net of (i) the cost of the underlying products and services; (ii) assessments and other fees charged by the credit and debit payment networks (along with any rebates provided by them); (iii) customer rebates and other discounts; and (iv) taxes assessed (e.g. VAT and VAT-like taxes) by a government, imposed concurrent with, a revenue producing transaction. The majority of the transaction price the Company receives for fulfilling the Payment Services performance obligation are comprised of one or a combination of the following: 1) interchange fees earned from the payment networks; 2) discount fees earned from merchants; 3) fees calculated based on a number of transactions processed; and 4) fees calculated based upon a percentage of the transaction value for the underlying goods or services (i.e. fuel, food, toll and transportation cards and vouchers). The Company recognizes revenue when the underlying transactions are complete and its performance obligations are satisfied. Transactions are considered complete depending upon the related payment solution but generally when the Company has authorized the transaction, validated that the transaction has no errors and accepted and posted the data to the Company’s records. The Company's performance obligation for its foreign exchange payment services is providing a foreign currency payment to a customer’s designated recipient and therefore, the Company recognizes revenue on foreign exchange payment services when the underlying payment is made. Revenues from foreign exchange and payment services are primarily comprised of the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market. Gift Card Products and Services The Company’s Gift product line delivers both stored value cards and card-based services primarily in the form of gift cards to retailers. These activities each represent performance obligations that are separate and distinct. Revenue for stored valued cards are recognized (gross of the underlying cost of the related card) at the point in time when control passes to the Company's customer, which is generally upon shipment. Card-based services consist of transaction processing and reporting of gift card transactions where the Company recognizes revenue based on an output measure of elapsed time for an unknown or unspecified quantity of transactions. As a result, the Company allocates and recognizes variable consideration over the estimated period of time over which the performance obligation is satisfied. Other The Company accounts for revenue from late fees and finance charges, in jurisdictions where permitted under local regulations, primarily in the U.S. and Canada in accordance with ASC 310, "Receivables". Such fees are recognized net of a provision for estimated uncollectible amounts, at the time the fees and finance charges are assessed and services are provided. The Company ceases billing and accruing for late fees and finance charges approximately 30 - 40 days after the customer’s balance becomes delinquent. The Company also writes foreign currency forward and option contracts for its customers to facilitate future payments in foreign currencies, and recognizes revenue in accordance with authoritative fair value and derivative accounting (ASC 815, "Derivatives"). Revenue is also derived from the sale of equipment in certain of the Company’s businesses, which is recognized at the time the device is sold and control has passed to the customer. This revenue is recognized gross of the cost of sales related to the equipment in "revenues, net" within the Unaudited Consolidated Statements of Income. The related cost of sales for the equipment is recorded within "processing expenses" in the Unaudited Consolidated Statements of Income. Disaggregation of Revenues The Company provides its services to customers across different payment solutions and geographies. Revenue by product (in millions) for the three and nine months ended September 30, 2018 was as follows:
*Columns may not calculate due to rounding. Revenue by geography (in millions) for the three and nine months ended September 30, 2018 was as follows:
*Columns may not calculate due to rounding. Revenues from contracts with customers, within the scope of Topic 606, represents approximately 90% of total consolidated revenues, net, in the three and nine month periods ended September 30, 2018. Contract Liabilities Deferred revenue contract liabilities for customers subject to ASC 606 were $19.9 million and $24.7 million as of September 30, 2018 and January 1, 2018, respectively. We expect to recognize substantially all of these amounts in revenues within approximately 12 months. Revenue recognized in the three and nine months ended September 30, 2018, that was included in the deferred revenue contract liability as of January 1, 2018 was approximately $17.1 million and $56.2 million, respectively. Costs to Obtain or Fulfill a Contract With the adoption of ASC 606, the Company began capitalizing the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, a sales commission). Costs incurred to fulfill a contract are capitalized if those costs meet all of the following criteria:
In order to determine the appropriate amortization period for contract costs, the Company considered a combination of factors, including customer attrition rates, estimated terms of customer relationships, the useful lives of technology used by the Company to provide products and services to its customers, whether further contract renewals are expected and if there is any incremental commission to be paid on a contract renewal. Contract acquisition and fulfillment costs are amortized using the straight-line method over the expected period of benefit (ranging from five to ten years). Costs to obtain a contract with an expected period of benefit of one year or less are recognized as an expense when incurred. The amortization of contract acquisition costs associated with sales commissions that qualify for capitalization will be recorded as selling expense in the Company’s Unaudited Consolidated Statements of Income. The amortization of contract acquisition costs associated with cash payments for client incentives is included as a reduction of revenues in the Company’s Unaudited Consolidated Statements of Income. During the three and nine months ended September 30, 2018, amortization of capitalized contract costs recorded in selling expense was $3.0 million and $9 million, respectively. Costs to obtain or fulfill a contract are classified as contract cost assets within "prepaid expenses and other current assets" and "other assets" in the Company’s Unaudited Consolidated Balance Sheets. At September 30, 2018, the Company had capitalized costs to obtain a contract of $12.2 million within prepaid expenses and $32.6 million within "other assets" in the Company’s Unaudited Consolidated Balance Sheets, respectively. Practical Expedients ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as allowed by ASC 606, the Company has elected to exclude this disclosure for any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. As described above, the Company's most significant performance obligations consist of variable consideration under a stand-ready series of distinct days of service. Such variable consideration meets the specified criteria for the disclosure exclusion; therefore, the majority of the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied is variable consideration that is not required for this disclosure. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. The Company has elected to exclude all sales taxes and other similar taxes from the transaction price. Accordingly, the Company presents all collections from customers for these taxes on a net basis, rather than having to assess whether the Company is acting as an agent or a principal in each taxing jurisdiction. In certain arrangements with customers, the Company has determined that certain promised services and products are immaterial in the context of the contract, both quantitatively and qualitatively. As a practical expedient, the Company is not required to adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised service or product to a customer and when the customer pays for the service or product will be one year or less. As of September 30, 2018, the Company’s contracts with customers did not contain a significant financing component. The Company adopted Topic 606 as of January 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company utilized a practical expedient to consider the aggregate effect of all modifications when identifying performance obligations and allocating transaction price. |
Accounts Receivable |
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Accounts Receivable | Accounts Receivable The Company maintains a $1.2 billion revolving trade accounts receivable Securitization Facility. Accounts receivable collateralized within our Securitization Facility relate to our U.S. trade receivables resulting from charge card activity. Pursuant to the terms of the Securitization Facility, the Company transfers certain of its domestic receivables, on a revolving basis, to FLEETCOR Funding LLC (Funding) a wholly-owned bankruptcy remote subsidiary. In turn, Funding transfers, on a revolving basis, up to $1.2 billion of undivided ownership interests in this pool of accounts receivable to a multi-seller, asset-backed commercial paper conduit (Conduit). Funding maintains a subordinated interest, in the form of over-collateralization, in a portion of the receivables sold to the Conduit. Purchases by the Conduit are financed with the sale of highly-rated commercial paper. The Company utilizes proceeds from the transferred assets as an alternative to other forms of financing to reduce its overall borrowing costs. The Company has agreed to continue servicing the sold receivables for the financial institution at market rates, which approximates the Company’s cost of servicing. The Company retains a residual interest in the accounts receivable sold as a form of credit enhancement. The residual interest’s fair value approximates carrying value due to its short-term nature. Funding determines the level of funding achieved by the sale of trade accounts receivable, subject to a maximum amount. The Company’s Unaudited Consolidated Balance Sheets and Statements of Income reflect the activity related to securitized accounts receivable and the corresponding securitized debt, including interest income, fees generated from late payments, provision for losses on accounts receivable and interest expense. The cash flows from borrowings and repayments, associated with the securitized debt, are presented as cash flows from financing activities. The Company’s accounts receivable and securitized accounts receivable include the following at September 30, 2018 and December 31, 2017 (in thousands):
A rollforward of the Company’s allowance for doubtful accounts related to accounts receivable for the nine month period ended September 30 is as follows (in thousands):
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Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements Fair value is a market-based measurement that reflects assumptions that market participants would use in pricing an asset or liability. GAAP discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. As the basis for evaluating such inputs, a three-tier value hierarchy prioritizes the inputs used in measuring fair value as follows:
The following table presents the Company’s financial assets and liabilities which are measured at fair values on a recurring basis at September 30, 2018 and December 31, 2017, (in thousands).
The Company has highly-liquid investments classified as cash equivalents, with original maturities of 90 days or less, included in our Unaudited Consolidated Balance Sheets. The Company utilizes Level 2 fair value determinations derived from directly or indirectly observable (market based) information to determine the fair value of these highly liquid investments. The Company has certain cash and cash equivalents that are invested on an overnight basis in repurchase agreements, money markets and certificates of deposit. The value of overnight repurchase agreements is determined based upon the quoted market prices for the treasury securities associated with the repurchase agreements. The value of money market instruments is the financial institutions' month-end statement, as these instruments are not tradeable and must be settled directly by us with the respective financial institution. Certificates of deposit are valued at cost, plus interest accrued. Given the short-term nature of these instruments, the carrying value approximates fair value. Foreign exchange derivative contracts are carried at fair value, with changes in fair value recognized in the Unaudited Consolidated Statements of Income. The fair value of the Company's derivatives is derived with reference to a valuation from a derivatives dealer operating in an active market, which approximates the fair value of these instruments. The fair value represents what would be received and or paid by the Company if the contracts were terminated as of the reporting date. Cash collateral received for foreign exchange derivatives is recorded within customer deposits in the Company's Unaudited Consolidated Balance Sheet at September 30, 2018. Cash collateral paid for foreign exchange derivatives is recorded within restricted cash in the Company's Unaudited Consolidated Balance Sheet at September 30, 2018. The level within the fair value hierarchy and the measurement technique are reviewed quarterly. Transfers between levels are deemed to have occurred at the end of the quarter. There were no transfers between fair value levels during the periods presented for 2018 and 2017. The Company’s assets that are measured at fair value on a nonrecurring basis or are evaluated with periodic testing for impairment include property, plant and equipment, investments, goodwill and other intangible assets. Estimates of the fair value of assets acquired and liabilities assumed in business combinations are generally developed using key inputs such as management’s projections of cash flows on a held-and-used basis (if applicable), discounted as appropriate, management’s projections of cash flows upon disposition and discount rates. Accordingly, these fair value measurements are in Level 3 of the fair value hierarchy. The Company regularly evaluates the carrying value of its cost method investments and during the third quarter of 2018, determined that the fair value of its investment in Qui was impaired as a result of a decline in operating results and difficulty in obtaining financing. The Company concluded that this decline in fair value was other than temporary and recorded a full write-off of the investment of $7.1 million. The fair value of the Company’s cash, accounts receivable, securitized accounts receivable and related facility, prepaid expenses and other current assets, accounts payable, accrued expenses, customer deposits and short-term borrowings approximate their respective carrying values due to the short-term maturities of the instruments. The carrying value of the Company’s debt obligations approximates fair value as the interest rates on the debt are variable market based interest rates that reset on a quarterly basis. These are each Level 2 fair value measurements, except for cash, which is a Level 1 fair value measurement. |
Stockholders' Equity |
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Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity On February 4, 2016, the Company's Board of Directors approved a stock repurchase program (the "Program") under which the Company may purchase up to an aggregate of $500 million of its common stock over the following 18 month period. On July 27, 2017, the Company's Board of Directors authorized an increase in the size of the Program by an additional $250 million and an extension of the Program by an additional 18 months. On November 1, 2017, the Company announced that its Board of Directors had authorized an increase in the size of the Program by an additional $350 million, and on July 17, 2018, our Board of Directors authorized an additional increase of $500 million in the size of the Program resulting in total aggregate repurchases authorized under the Program of $1.6 billion. With the increase and giving effect to the Company's $970.8 million of previous repurchases, the Company may repurchase up to $629.2 million in shares of its common stock at any time prior to February 1, 2019. Any stock repurchases may be made at times and in such amounts as deemed appropriate. The timing and amount of stock repurchases, if any, will depend on a variety of factors including the stock price, market conditions, corporate and regulatory requirements, and any additional constraints related to material inside information the Company may possess. Any repurchases have been and are expected to be funded by a combination of available cash flow from the business, working capital and debt. Since the beginning of the Program, 6,010,210 shares for an aggregate purchase price of $970.8 million have been repurchased. There were 1,896,106 shares totaling $380.7 million repurchased under the Program during the nine months ended September 30, 2018. No repurchases were made during the three months ended September 30, 2018. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company has Stock Incentive Plans (the Plans) pursuant to which the Company’s board of directors may grant stock options or restricted stock to employees. On February 7, 2018, the stockholders of the Company approved the FleetCor Technologies, Inc. Amended and Restated 2010 Equity Incentive Plan (the "Amended Plan"). The Amended Plan was authorized and approved by the Company's Board of Directors on December 20, 2017, and Company's stockholders at a meeting held on February 7, 2018. The Amended Plan amends the Registrant’s existing 2010 Equity Incentive Plan (as amended, the "Prior Plan") to, among other things, increase the number of shares of common stock available for issuance from 13,250,000 to 16,750,000 and make certain other amendments to the Prior Plan. The table below summarizes the expense recognized related to share-based payments recognized for the three and nine month periods ended September 30 (in thousands):
The tax benefits recorded on stock based compensation were $31.2 million and $36.1 million for the nine month period ended September 30, 2018 and 2017, respectively. The following table summarizes the Company’s total unrecognized compensation cost related to stock-based compensation as of September 30, 2018 (cost in thousands):
Stock Options Stock options are granted with an exercise price estimated to be equal to the fair market value on the date of grant as authorized by the Company’s board of directors. Options granted have vesting provisions ranging from one to five years and vesting of the options is generally based on the passage of time or performance. Stock option grants are subject to forfeiture if employment terminates prior to vesting. The following summarizes the changes in the number of shares of common stock under option for the nine month period ended September 30, 2018 (shares/options and aggregate intrinsic value in thousands):
The aggregate intrinsic value of stock options exercisable at September 30, 2018 was $626.5 million. The weighted average remaining contractual term of options exercisable at September 30, 2018 was 5.2 years. The fair value of stock option awards granted was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions for grants or modifications during the nine month periods ended September 30, 2018 and 2017:
Restricted Stock Awards of restricted stock and restricted stock units are independent of stock option grants and are subject to forfeiture if employment terminates prior to vesting. The vesting of shares granted is generally based on the passage of time, performance or market conditions, or a combination of these. Shares vesting based on the passage of time have vesting provisions of one to three years. The following table summarizes the changes in the number of shares of restricted stock and restricted stock units for the nine months ended September 30, 2018 (shares in thousands):
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Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions 2018 Acquisitions During the nine months ended September 2018, the Company made payments of $3.8 million related to acquisitions occurring in prior years. 2017 Acquisitions During 2017, the Company completed acquisitions with an aggregate purchase price of $725.1 million, net of cash acquired of $96.3 million and inclusive of notes payable of $29.3 million. During 2017, the Company made investments in other businesses of $39 million. Cambridge Global Payments On August 9, 2017, the Company acquired Cambridge, a business to business (B2B) international payments provider, for approximately $616.0 million in cash, net of cash acquired of $94.5 million and inclusive of a note payable of $23.8 million. Cambridge processes B2B cross-border payments, assisting business clients in making international payments. The purpose of this acquisition is to further expand the Company's corporate payments footprint. The Company financed the acquisition using a combination of existing cash and borrowings under its existing credit facility. The results from Cambridge are reported in its North America segment. The following table summarizes the acquisition accounting for Cambridge (in thousands):
The fair value of intangible assets acquired and the related estimated useful lives consisted of the following (in thousands):
Along with the Company's acquisition of Cambridge, the Company signed noncompete agreements with certain parties with an estimated fair value of $5.8 million. Goodwill recorded is comprised primarily of expected synergies from combining the operations of the Company and Cambridge, as well as assembled workforce. Other During 2017, the Company acquired Creative Lodging Solutions ("CLS"), a lodging business, and a fuel card provider in Russia for approximately $109.1 million, net of cash acquired of $1.8 million and inclusive of a note payable of $5.5 million. The Company financed the acquisitions using a combination of existing cash and borrowings under its existing credit facility. The following table summarizes the acquisition accounting for the acquisitions (in thousands):
The estimated fair value of intangible assets acquired and the related estimated useful lives consisted of the following (in thousands):
Along with the Company's acquisition of CLS, the Company signed noncompete agreements with certain parties with an estimated fair value of $3.9 million. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets A summary of changes in the Company’s goodwill by reportable business segment is as follows (in thousands):
As of September 30, 2018 and December 31, 2017, other intangible assets consisted of the following (in thousands):
Changes in foreign exchange rates resulted in a $125.2 million decrease to the carrying values of other intangible assets in the nine months ended September 30, 2018. Amortization expense related to intangible assets for the nine months ended September 30, 2018 and 2017 was $165.0 million and $158.9 million, respectively. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The Company’s debt instruments consist primarily of term notes, revolving lines of credit and a Securitization Facility as follows (in thousands):
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Interest on amounts outstanding under the Credit Agreement (other than the term B loan) accrues based on the British Bankers Association LIBOR Rate (the Eurocurrency Rate), plus a margin based on a leverage ratio, or our option, the Base Rate (defined as the rate equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the prime rate announced by Bank of America, N.A., or (c) the Eurocurrency Rate plus 1.00%) plus a margin based on a leverage ratio. Interest on the term B loan facility accrues based on the Eurocurrency Rate plus 2.00% for Eurocurrency Loans or 1.00% for Base Rate Loans. In addition, the Company pays a quarterly commitment fee at a rate per annum ranging from 0.20% to 0.40% of the daily unused portion of the credit facility. The Company has unamortized debt issuance costs of $8.0 million related to the Revolver as of September 30, 2018 recorded within other assets in the unaudited consolidated balance sheet. The Company has unamortized debt discounts of $4.9 million related to the term A facility and $0.6 million related to the term B facility, and deferred financings costs of $4.3 million at September 30, 2018. At September 30, 2018, the interest rate on the term A loan and the domestic revolving A facility was 3.74%, the interest rate on the foreign revolving B facility was 2.23%, the interest rate on the revolving B facility foreign swing line of credit was 2.20% and the interest rate on the term B loan was 4.24%. The unused credit facility fee was 0.30% for all revolving facilities at September 30, 2018.
The Company was in compliance with all financial and non-financial covenants at September 30, 2018. |
Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. Our quarterly tax provision and our quarterly estimate of our annual effective tax rate are subject to variation due to several factors, including variability in accurately predicting our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower. On December 22, 2017, the U.S. government enacted tax legislation referred to as the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time Deemed Repatriation Transition Tax (“Transition Tax”) on certain unrepatriated earnings of foreign subsidiaries that can be paid over eight years; (3) a new provision designed to tax global intangible low-taxed income (GILTI), which allows for the possibility of using foreign tax credits (FTCs) and a deduction of up to 50 percent to offset the income tax liability (subject to some limitations); (4) the repeal of the domestic production activity deduction beginning January 1, 2018; (5) limitations on the deductibility of certain executive compensation; and (6) a new limitation on deductible interest expense beginning January 1, 2018. The Company has not completed its accounting for the tax effects of enactment of the Tax Act. However, the Company has made a reasonable estimate of the effects on its existing deferred tax balances and the one-time Transition Tax. During the three month period ended September 30, 2018, the Company recognized adjustments totaling $22.7 million to the provisional amounts recorded at December 31, 2017 and included these adjustments as a component of income tax expense from continuing operations. The Company will continue to make and refine its calculations as additional analysis is completed. The Company is continuing to gather additional information, including, but not limited to, finalizing the calculation of post-1986 prescribed foreign E&P, finalizing foreign tax pools for foreign tax credit purposes, and finalizing the amounts held in cash or other specified assets, to complete the Company's accounting for these items and expect to complete its accounting within the measurement period. The SEC staff issued Staff Accounting Bulletin No. 118, "Income Tax Accounting Implications of the Tax Cuts and Jobs Act" ("SAB 118"), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. For those items for which it was able to determine a reasonable estimate, the Company recognized a provisional net tax benefit of $128.2 million during 2017. This net benefit primarily consists of a net benefit for the corporate rate reduction on the deferred tax assets and liabilities of $210 million and a net expense for the Transition Tax of $81.8 million. After the adjustments recognized during the three months ended September 30, 2018, the provisional net tax benefit was adjusted to $105.5 million. This net benefit primarily consists of a net benefit on deferred tax assets and liabilities of $202.9 million and a net expense for the Transition Tax of $97.4 million. Previously, the Company was not able to make a reasonable estimate of the impact of state taxes on adjustments made to federal temporary differences as a result of the Tax Act, or the impact of the new limitations on the deductibility of certain executive compensation. Included in the adjustments recognized during the three months ended September 30, 2018 in the amount of $22.7 million is an adjustment in the amount of $9.3 million. The adjustment is to recognize the impact of state taxes on adjustments made to federal temporary differences as a result of the Tax Act. The provision for income taxes differs from amounts computed by applying the U.S. federal tax rate of 21% for 2018 and 35% for 2017 to income before income taxes for the three months ended September 30, 2018 and 2017 due to the following (in thousands):
1Certain amounts have been reclassified within the schedule above for comparative purposes. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The Company reports basic and diluted earnings per share. Basic earnings per share is computed by dividing net income attributable to shareholders of the Company by the weighted average number of common shares outstanding during the reported period. Diluted earnings per share reflect the potential dilution related to equity-based incentives using the treasury stock method. The calculation and reconciliation of basic and diluted earnings per share for the three and nine month periods ended September 30 follows (in thousands, except per share data):
Diluted earnings per share for the three months ended September 30, 2018 and 2017 excludes the effect of 0.1 million and 3.5 million shares of common stock, respectively, that may be issued upon the exercise of employee stock options because such effect would be anti-dilutive. Diluted earnings per share also excludes the effect of 0.2 million and 0.3 million shares of performance based restricted stock for which the performance criteria have not yet been achieved for the three month periods ended September 30, 2018 and 2017, respectively. |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | Segments The Company reports information about its operating segments in accordance with the authoritative guidance related to segments. The Company’s reportable segments represent components of the business for which separate financial information is evaluated regularly by the chief operating decision maker in determining how to allocate resources and in assessing performance. The Company operates in two reportable segments, North America and International. There were no inter-segment sales. The Company’s segment results are as follows for the three and nine month periods ended September 30 (in thousands):
1Reflects the impact of the Company's adoption of ASC 606 and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effect of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect ASC 606. 2The results from our Cambridge business acquired in the third quarter of 2017 are reported in our North America segment. As we have concluded that this business is part of our North America segment, the results for this business have been recast from International segment into our North America segment for the three and nine month periods ended September 30, 2017. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the ordinary course of business, the Company is involved in various pending or threatened legal actions, arbitration proceedings, claims, subpoenas, and matters relating to compliance with laws and regulations (collectively, legal proceedings). Based on our current knowledge, management presently does not believe that the liabilities arising from these legal proceedings will have a material adverse effect on our consolidated financial condition, results of operations or cash flows. However, it is possible that the ultimate resolution of these legal proceedings could have a material adverse effect on our results of operations and financial condition for any particular period. Shareholder Class Action and Derivative Lawsuits On June 14, 2017, a shareholder filed a class action complaint in the United States District Court for the Northern District of Georgia against the Company and certain of its officers and directors on behalf of all persons who purchased or otherwise acquired the Company’s stock between February 5, 2016 and May 2, 2017. On October 13, 2017, the shareholder filed an amended complaint asserting claims on behalf of a putative class of all persons who purchased or otherwise acquired the Company's common stock between February 4, 2016 and May 3, 2017. The complaint alleges that the defendants made false or misleading statements regarding fee charges and the reasons for its earnings and growth in certain press releases and other public statements in violation of the federal securities laws. Plaintiff seeks class certification, unspecified monetary damages, costs, and attorneys’ fees. The Company disputes the allegations in the complaint and intends to vigorously defend against the claims. On July 10, 2017, a shareholder derivative complaint was filed against the Company and certain of the Company’s directors and officers in the United States District Court for the Northern District of Georgia seeking recovery on behalf of the Company. The derivative complaint alleges that the defendants issued a false and misleading proxy statement in violation of the federal securities laws; that defendants breached their fiduciary duties by causing or permitting the Company to make allegedly false and misleading public statements concerning the Company’s fee charges, and financial and business prospects; and that certain defendants breached their fiduciary duties through allegedly improper sales of stock. The complaint seeks unspecified monetary damages on behalf of the Company, corporate governance reforms, disgorgement of profits, benefits and compensation by the defendants, restitution, costs, and attorneys’ and experts’ fees. The defendants dispute the allegations in the complaint and intend to vigorously defend against the claims. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult and requires an extensive degree of judgment, particularly where, as here, the matters involve indeterminate claims for monetary damages, and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from the matters described above. |
Asset Dispositions |
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Discontinued Operations and Disposal Groups [Abstract] | |
Asset Dispositions | Asset Dispositions Telematics Businesses As part of the Company's plan to exit the telematics business, on July 27, 2017, the Company sold NexTraq, a U.S. fleet telematics business, to Michelin Group for $316 million. The Company recorded a pre-tax gain on the disposal of NexTraq of $175.0 million during the third quarter of 2017, which was net of transaction closing costs. The Company recorded tax on the gain of disposal of $65.8 million. NexTraq was historically included in the Company's North America segment. On September 30, 2017, the Company entered into an amended Masternaut investment agreement that resulted in the loss of significant influence, and the Company began accounting for the Masternaut investment by applying the cost method. Additionally, in October 2018, the Company reached an agreement on the terms for the sale and transition of the Chevron portfolio for approximately $160 million, which will be recorded as a pre-tax gain, less any transaction costs. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments As a result of the Cambridge acquisition during 2017, the Company writes derivatives, primarily foreign currency forward contracts, option contracts, and swaps, mostly with small and medium size enterprises that are customers and derives a currency spread from this activity. Derivative transactions include:
The credit risk inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. The Company performs a review of the credit risk of these counterparties at the inception of the contract and on an ongoing basis. The Company also monitors the concentration of its contracts with any individual counterparty against limits at the individual counterparty level. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements, but takes action when doubt arises about the counterparties' ability to perform. These actions may include requiring customers to post or increase collateral, and for all counterparties, the possible termination of the related contracts. The Company does not designate any of its foreign exchange derivatives as hedging instruments in accordance with ASC 815. The aggregate equivalent U.S. dollar notional amount of foreign exchange derivative customer contracts held by the Company as of September 30, 2018 and December 31, 2017 (in millions) is presented in the table below. Notional amounts do not reflect the netting of offsetting trades, although these offsetting positions may result in minimal overall market risk. Aggregate derivative notional amounts can fluctuate from period to period in the normal course of business based on market conditions, levels of customer activity and other factors.
The majority of customer foreign exchange contracts are written in currencies such as the U.S. Dollar, Canadian Dollar, British Pound, Euro and Australian Dollar. The following table summarizes the fair value of derivatives reported in the Unaudited Consolidated Balance Sheet as of September 30, 2018 and December 31, 2017 (in millions):
The fair values of derivative assets and liabilities associated with contracts which include netting language that the Company believes to be enforceable have been netted to present the Company's net exposure with these counterparties. The Company recognizes all derivative assets, net in prepaid expense and other current assets and all derivative liabilities, net in other current liabilities, after netting at the customer level, as right of offset exists, in its Unaudited Consolidated Balance Sheets at their fair value. The gain or loss on the fair value is recognized immediately within revenues, net in the Unaudited Consolidated Statements of Income. The Company does not offset fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral. The derivative assets and derivative liabilities in the preceding table were recorded in "other current assets" and "other current liabilities" at each balance sheet date, respectively, in the Unaudited Consolidated Balance Sheet. The Company receives cash from customers as collateral for trade exposures, which is recorded within "cash and cash equivalents: and "customer deposits" in the Unaudited Consolidated Balance Sheet. The customer has the right to recall their collateral in the event exposures move in their favor, they unwind all outstanding trades or they cease to do business with the Company. |
Summary of Significant Accounting Policies (Policies) |
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Basis of Presentation | Basis of Presentation Throughout this report, the terms “our,” “we,” “us,” and the “Company” refers to FLEETCOR Technologies, Inc. and its subsidiaries. The Company prepared the accompanying interim consolidated financial statements in accordance with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”). The unaudited consolidated financial statements reflect all adjustments considered necessary for fair presentation. These adjustments consist of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. Actual results may differ from these estimates. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. |
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Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at the rates of exchange in effect at period-end. The related translation adjustments are made directly to accumulated other comprehensive income. Income and expenses are translated at the average monthly rates of exchange in effect during the period. Gains and losses from foreign currency transactions of these subsidiaries are included in net income. |
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Derivatives | Derivatives The Company, through its Cambridge Global Payments ("Cambridge") subsidiary, facilitates cross-currency corporate payments by writing derivatives to customers, which are not designated as hedging instruments. The majority of this business' revenue is from exchanges of currency at spot rates, which enable customers to make cross-currency payments. In addition, the Company also writes foreign currency forward and option contracts for its customers to facilitate future payments. The duration of these derivative contracts at inception is generally less than one year. The Company aggregates its foreign exchange exposures arising from customer contracts, including forwards, options and spot exchanges of currency, and hedges (economic hedge) the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. The changes in fair value related to these contracts are recorded in the Unaudited Consolidated Statements of Income. The Company recognizes all derivatives in "prepaid expenses and other current assets" and "other current liabilities" in the accompanying Unaudited Consolidated Balance Sheets at their fair value. All cash flows associated with derivatives are included in cash flows from operating activities in the Unaudited Consolidated Statements of Cash Flows. |
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Adoption of New Accounting Standards | Adoption of New Accounting Standards Impact of Adoption of ASC 606 In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)", which replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. ASU 2014-09, as amended by ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date", is effective for years beginning after December 15, 2017, including interim periods, with early adoption permitted for years beginning after December 15, 2016. Since the issuance of ASU 2014-09, the FASB has issued additional interpretive guidance, including new accounting standard updates, which clarifies certain points of the standard and modifies certain requirements. Effective January 1, 2018, we adopted ASC 606 using the modified retrospective method, for contracts that were not completed as of the date of initial application, resulting in a cumulative effect adjustment to retained earnings on January 1, 2018. For contracts that were modified before January 1, 2018, the Company has not retrospectively restated contracts for those modifications but instead reflected the aggregate effect of these modifications when identifying the satisfied and unsatisfied performance obligations, as allowed within the transition practical expedients. The cumulative impact to our retained earnings at January 1, 2018 was $30.9 million, due to the capitalization of costs to acquire contracts under the new standard, with a corresponding increase to prepaid expense and other current assets of $10.2 million, other assets of $30.3 million and deferred income taxes (liabilities) of $9.6 million. Additionally, under the new standard certain costs (e.g., merchant commissions and fees paid to credit card associations) will be presented net in revenues as the amounts represent payments to our customers that are not considered in exchange for a distinct good or service that the customer transfers to the Company. The impact to the Company's revenue, operating expenses, income from continuing operations after taxes, net income and basic and diluted earnings per share (EPS) for the three and nine months ended September 30, 2018 was as follows:
The adoption of ASC 606 did not impact our accounting for revenues derived from late fees, finance charges, and certain other charge card fees or certain of our foreign currency contracts, which continue to be accounted for under existing authoritative guidance, as discussed further below. Accounting for Leases In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. This ASU also requires disclosures to provide additional information about the amounts recorded in the financial statements. This ASU is effective for the Company for annual periods beginning after December 15, 2018 and interim periods therein. Early adoption is permitted. On July 31, 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements”, which provides (1) an optional transition method that entities can use when adopting ASC 842 and (2) a practical expedient that permits lessors to not separate nonlease components from the associated lease component if certain conditions are met. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to elect this transition method at the adoption date of January 1, 2019 and will not restate comparative periods. The Company is assessing the practical expedients available for adoption under the new standard and expects to adopt the package of practical expedients. The Company is analyzing our lease portfolio and updating accounting policies and internal controls that will be impacted by the new guidance. The Company has also selected lease accounting software to support the new reporting requirements. The Company expects to record right of use assets and liabilities for its leases in the consolidated balance sheet upon adoption. Accounting for Breakage In March 2016, the FASB issued ASU 2016-04, “Liabilities-Extinguishments of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products”, which requires entities that sell prepaid stored value products redeemable for goods, services or cash at third-party merchants to derecognize liabilities related to those products for breakage. This ASU is effective for the Company for reporting periods beginning after December 15, 2017. The ASU must be adopted using either a modified retrospective approach with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption or a full retrospective approach. The Company adopted this guidance on January 1, 2018, which did not have a material impact on the Company's results of operations, financial condition, or cash flows. Intra-Entity Transfers In October 2016, the FASB issued ASU 2016-16 “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. The Company adopted this ASU on January 1, 2018, which resulted in an increase of approximately $17.1 million to retained earnings and deferred tax assets net of valuation allowances. Cash Flow Classification In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments", which amends the guidance in ASC 230, Statement of Cash Flows. This amended guidance reduces the diversity in practice that has resulted from the lack of consistent principles related to the classification of certain cash receipts and payments in the statement of cash flows. This ASU is effective for the Company for reporting periods beginning after December 15, 2017. Entities must apply the guidance retrospectively to all periods presented but may apply it prospectively from the earliest date practicable if retrospective application would be impracticable. The Company adopted this new guidance on January 1, 2018. The adoption of this new guidance did not have a material impact on the results of operations, financial condition, or cash flows. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash", which amends the guidance in ASC 230, Statement of Cash Flows, on the classification and presentation of restricted cash in the statement of cash flows. This ASU is effective for the Company for reporting periods beginning after December 15, 2017 and changes due to adoption are applied using a retrospective transition method to each period presented. The Company adopted this new guidance on January 1, 2018, and applied retrospectively to results for 2017. The adoption of Topic 230 resulted in the statement of cash flows presenting the changes in the total of cash, cash equivalents and restricted cash. Intangibles - Goodwill and Other Impairment In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment", which eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1). The standard has tiered effective dates, starting in 2020 for calendar-year public business entities that meet the definition of an SEC filer. Early adoption is permitted for interim and annual goodwill impairment testing dates after January 1, 2017. The adoption of this ASU on January 1, 2018 did not have a material impact on the results of operations, financial condition, or cash flows. Definition of a Business In January 2017, the FASB issued ASU 2017-01, "Clarifying the Definition of a Business", which amends the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the set of transferred assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. The guidance is effective for the Company for reporting periods beginning after December 15, 2017, and interim periods within those years. The Company adopted this new guidance on January 1, 2018. The adoption of this new guidance did not have a material impact on the results of operations, financial condition, or cash flows. Accounting for Modifications to Stock-Based Compensation In May 2017, the FASB issued ASU 2017-09, "Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting", which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. The guidance is effective for the Company for reporting periods beginning after December 15, 2017, and interim periods within those years. The Company adopted this new guidance on January 1, 2018. The adoption of this new guidance did not have a material impact on the results of operations, financial condition, or cash flows. Accounting for Derivative Financial Instruments In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", which amends the hedge accounting recognition and presentation requirements in ASC 815. The FASB issued accounting guidance to better align hedge accounting with a company’s risk management activities, simplify the application of hedge accounting and improve the disclosures of hedging arrangements. The guidance is effective for the Company for reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows. Comprehensive Income Classification In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income", that gives entities the option to reclassify to retained earnings tax effects related to items that have been stranded in accumulated other comprehensive income as a result of the Tax Cuts and Jobs Act (the "Tax Act"). An entity that elects to reclassify these amounts must reclassify stranded tax effects related to the Tax Act’s change in U.S. federal tax rate for all items accounted for in other comprehensive income. These entities can also elect to reclassify other stranded effects that relate to the Tax Act but do not directly relate to the change in the federal rate. For all entities, the guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted for periods for which financial statements have not yet been issued or made available for issuance. Entities can choose whether to apply the amendments retrospectively to each period in which the effect of the Tax Act is recognized or to apply the amendments in the period of adoption. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows. Non-Employee Share-Based Payments In June 2018, the FASB issued ASU 2018-07, "Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting", that supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees. Under the new guidance, the existing employee guidance will apply to non-employee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of non-employee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for non-employee awards. The guidance is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, including in interim periods, but no earlier than an entity’s adoption of ASC 606. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows. Cloud Computing Arrangements On August 29, 2018, the FASB issued ASU 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", that provides guidance on implementation costs incurred in a cloud computing arrangement (CCA) that is a service contract. The ASU, which was released in response to a consensus reached by the EITF at its June 2018 meeting, aligns the accounting for such costs with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, the ASU amends ASC 350 to include in its scope implementation costs of a CCA that is a service contract and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized in such a CCA. The guidance is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods. The guidance should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows. Fair Value Measurement On August 28, 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement", which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC 820. The guidance is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The guidance on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other guidance should be applied retrospectively to all periods presented upon their effective date. The Company is permitted to early adopt any removed or modified disclosures upon issuance of this guidance and delay adoption of the additional disclosures until their effective date. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows. |
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Revenue Recognition | Revenue Recognition The Company provides payment solutions to our business, merchant, consumer and payment network customers. Our payment solutions are primarily focused on specific commercial spend categories, including fuel, lodging, tolls, and general corporate payments, as well as gift card solutions (stored value cards). The Company provides products that help businesses of all sizes control, simplify and secure payment of various domestic and cross-border payables using specialized payment products. The Company also provides other payment solutions for fleet maintenance, employee benefits and long haul transportation-related services. Payment Services The Company’s primary performance obligation for the majority of its payment solution products (fuel, lodging, tolls, corporate payments, among others) is to stand-ready to provide authorization and processing services ("payment services") for an unknown or unspecified quantity of transactions and the consideration received is contingent upon the customer’s use (e.g., number of transactions submitted and processed) of the related payment services. Accordingly, the total transaction price is variable. Payment services involve a series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. As a result, the Company allocates and recognizes variable consideration in the period it has the contractual right to invoice the customer. The Company records revenue for its payment services net of (i) the cost of the underlying products and services; (ii) assessments and other fees charged by the credit and debit payment networks (along with any rebates provided by them); (iii) customer rebates and other discounts; and (iv) taxes assessed (e.g. VAT and VAT-like taxes) by a government, imposed concurrent with, a revenue producing transaction. The majority of the transaction price the Company receives for fulfilling the Payment Services performance obligation are comprised of one or a combination of the following: 1) interchange fees earned from the payment networks; 2) discount fees earned from merchants; 3) fees calculated based on a number of transactions processed; and 4) fees calculated based upon a percentage of the transaction value for the underlying goods or services (i.e. fuel, food, toll and transportation cards and vouchers). The Company recognizes revenue when the underlying transactions are complete and its performance obligations are satisfied. Transactions are considered complete depending upon the related payment solution but generally when the Company has authorized the transaction, validated that the transaction has no errors and accepted and posted the data to the Company’s records. The Company's performance obligation for its foreign exchange payment services is providing a foreign currency payment to a customer’s designated recipient and therefore, the Company recognizes revenue on foreign exchange payment services when the underlying payment is made. Revenues from foreign exchange and payment services are primarily comprised of the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market. Gift Card Products and Services The Company’s Gift product line delivers both stored value cards and card-based services primarily in the form of gift cards to retailers. These activities each represent performance obligations that are separate and distinct. Revenue for stored valued cards are recognized (gross of the underlying cost of the related card) at the point in time when control passes to the Company's customer, which is generally upon shipment. Card-based services consist of transaction processing and reporting of gift card transactions where the Company recognizes revenue based on an output measure of elapsed time for an unknown or unspecified quantity of transactions. As a result, the Company allocates and recognizes variable consideration over the estimated period of time over which the performance obligation is satisfied. Other The Company accounts for revenue from late fees and finance charges, in jurisdictions where permitted under local regulations, primarily in the U.S. and Canada in accordance with ASC 310, "Receivables". Such fees are recognized net of a provision for estimated uncollectible amounts, at the time the fees and finance charges are assessed and services are provided. The Company ceases billing and accruing for late fees and finance charges approximately 30 - 40 days after the customer’s balance becomes delinquent. The Company also writes foreign currency forward and option contracts for its customers to facilitate future payments in foreign currencies, and recognizes revenue in accordance with authoritative fair value and derivative accounting (ASC 815, "Derivatives"). Revenue is also derived from the sale of equipment in certain of the Company’s businesses, which is recognized at the time the device is sold and control has passed to the customer. This revenue is recognized gross of the cost of sales related to the equipment in "revenues, net" within the Unaudited Consolidated Statements of Income. The related cost of sales for the equipment is recorded within "processing expenses" in the Unaudited Consolidated Statements of Income. Disaggregation of Revenues The Company provides its services to customers across different payment solutions and geographies. Revenue by product (in millions) for the three and nine months ended September 30, 2018 was as follows:
*Columns may not calculate due to rounding. Revenue by geography (in millions) for the three and nine months ended September 30, 2018 was as follows:
*Columns may not calculate due to rounding. Revenues from contracts with customers, within the scope of Topic 606, represents approximately 90% of total consolidated revenues, net, in the three and nine month periods ended September 30, 2018. Contract Liabilities Deferred revenue contract liabilities for customers subject to ASC 606 were $19.9 million and $24.7 million as of September 30, 2018 and January 1, 2018, respectively. We expect to recognize substantially all of these amounts in revenues within approximately 12 months. Revenue recognized in the three and nine months ended September 30, 2018, that was included in the deferred revenue contract liability as of January 1, 2018 was approximately $17.1 million and $56.2 million, respectively. Costs to Obtain or Fulfill a Contract With the adoption of ASC 606, the Company began capitalizing the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, a sales commission). Costs incurred to fulfill a contract are capitalized if those costs meet all of the following criteria:
In order to determine the appropriate amortization period for contract costs, the Company considered a combination of factors, including customer attrition rates, estimated terms of customer relationships, the useful lives of technology used by the Company to provide products and services to its customers, whether further contract renewals are expected and if there is any incremental commission to be paid on a contract renewal. Contract acquisition and fulfillment costs are amortized using the straight-line method over the expected period of benefit (ranging from five to ten years). Costs to obtain a contract with an expected period of benefit of one year or less are recognized as an expense when incurred. The amortization of contract acquisition costs associated with sales commissions that qualify for capitalization will be recorded as selling expense in the Company’s Unaudited Consolidated Statements of Income. The amortization of contract acquisition costs associated with cash payments for client incentives is included as a reduction of revenues in the Company’s Unaudited Consolidated Statements of Income. During the three and nine months ended September 30, 2018, amortization of capitalized contract costs recorded in selling expense was $3.0 million and $9 million, respectively. Costs to obtain or fulfill a contract are classified as contract cost assets within "prepaid expenses and other current assets" and "other assets" in the Company’s Unaudited Consolidated Balance Sheets. At September 30, 2018, the Company had capitalized costs to obtain a contract of $12.2 million within prepaid expenses and $32.6 million within "other assets" in the Company’s Unaudited Consolidated Balance Sheets, respectively. Practical Expedients ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as allowed by ASC 606, the Company has elected to exclude this disclosure for any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. As described above, the Company's most significant performance obligations consist of variable consideration under a stand-ready series of distinct days of service. Such variable consideration meets the specified criteria for the disclosure exclusion; therefore, the majority of the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied is variable consideration that is not required for this disclosure. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. The Company has elected to exclude all sales taxes and other similar taxes from the transaction price. Accordingly, the Company presents all collections from customers for these taxes on a net basis, rather than having to assess whether the Company is acting as an agent or a principal in each taxing jurisdiction. In certain arrangements with customers, the Company has determined that certain promised services and products are immaterial in the context of the contract, both quantitatively and qualitatively. As a practical expedient, the Company is not required to adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised service or product to a customer and when the customer pays for the service or product will be one year or less. As of September 30, 2018, the Company’s contracts with customers did not contain a significant financing component. The Company adopted Topic 606 as of January 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company utilized a practical expedient to consider the aggregate effect of all modifications when identifying performance obligations and allocating transaction price. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The impact to the Company's revenue, operating expenses, income from continuing operations after taxes, net income and basic and diluted earnings per share (EPS) for the three and nine months ended September 30, 2018 was as follows:
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Revenue Recognition (Tables) |
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Disaggregation of Revenue | Revenue by geography (in millions) for the three and nine months ended September 30, 2018 was as follows:
*Columns may not calculate due to rounding. Revenue by product (in millions) for the three and nine months ended September 30, 2018 was as follows:
*Columns may not calculate due to rounding. |
Accounts Receivable (Tables) |
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Company's Accounts Receivable and Securitized Accounts Receivable | The Company’s accounts receivable and securitized accounts receivable include the following at September 30, 2018 and December 31, 2017 (in thousands):
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Allowance for Doubtful Accounts Related to Accounts Receivable | A rollforward of the Company’s allowance for doubtful accounts related to accounts receivable for the nine month period ended September 30 is as follows (in thousands):
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Fair Value Measurements (Tables) |
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Financial Assets and Liabilities Measured at Fair Value | The following table presents the Company’s financial assets and liabilities which are measured at fair values on a recurring basis at September 30, 2018 and December 31, 2017, (in thousands).
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Stock-Based Compensation (Tables) |
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Expense Related to Share-Based Payments | The table below summarizes the expense recognized related to share-based payments recognized for the three and nine month periods ended September 30 (in thousands):
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Summary of Total Unrecognized Compensation Cost Related to Stock-Based Compensation | The following table summarizes the Company’s total unrecognized compensation cost related to stock-based compensation as of September 30, 2018 (cost in thousands):
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Summary of Changes in Number of Shares of Common Stock Under Option | The following summarizes the changes in the number of shares of common stock under option for the nine month period ended September 30, 2018 (shares/options and aggregate intrinsic value in thousands):
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Schedule of Weighted-Average Assumptions | The fair value of stock option awards granted was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions for grants or modifications during the nine month periods ended September 30, 2018 and 2017:
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Summary of Changes in Number of Shares of Restricted Stock and Restricted Stock Units | The following table summarizes the changes in the number of shares of restricted stock and restricted stock units for the nine months ended September 30, 2018 (shares in thousands):
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Acquisitions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Acquisition Accounting | The following table summarizes the acquisition accounting for the acquisitions (in thousands):
The following table summarizes the acquisition accounting for Cambridge (in thousands):
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Summary of Preliminary Estimated Fair Value of Intangible Assets Acquired and the Related Estimated Useful Lives | The fair value of intangible assets acquired and the related estimated useful lives consisted of the following (in thousands):
The estimated fair value of intangible assets acquired and the related estimated useful lives consisted of the following (in thousands):
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Goodwill and Other Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Goodwill by Reportable Business Segment | A summary of changes in the Company’s goodwill by reportable business segment is as follows (in thousands):
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Schedule of Other Intangible Assets | As of September 30, 2018 and December 31, 2017, other intangible assets consisted of the following (in thousands):
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Debt Instruments | The Company’s debt instruments consist primarily of term notes, revolving lines of credit and a Securitization Facility as follows (in thousands):
______________________
Interest on amounts outstanding under the Credit Agreement (other than the term B loan) accrues based on the British Bankers Association LIBOR Rate (the Eurocurrency Rate), plus a margin based on a leverage ratio, or our option, the Base Rate (defined as the rate equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the prime rate announced by Bank of America, N.A., or (c) the Eurocurrency Rate plus 1.00%) plus a margin based on a leverage ratio. Interest on the term B loan facility accrues based on the Eurocurrency Rate plus 2.00% for Eurocurrency Loans or 1.00% for Base Rate Loans. In addition, the Company pays a quarterly commitment fee at a rate per annum ranging from 0.20% to 0.40% of the daily unused portion of the credit facility. The Company has unamortized debt issuance costs of $8.0 million related to the Revolver as of September 30, 2018 recorded within other assets in the unaudited consolidated balance sheet. The Company has unamortized debt discounts of $4.9 million related to the term A facility and $0.6 million related to the term B facility, and deferred financings costs of $4.3 million at September 30, 2018. At September 30, 2018, the interest rate on the term A loan and the domestic revolving A facility was 3.74%, the interest rate on the foreign revolving B facility was 2.23%, the interest rate on the revolving B facility foreign swing line of credit was 2.20% and the interest rate on the term B loan was 4.24%. The unused credit facility fee was 0.30% for all revolving facilities at September 30, 2018.
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Income Taxes (Tables) |
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Provision for Income Taxes and U.S. Federal Tax Rate | The provision for income taxes differs from amounts computed by applying the U.S. federal tax rate of 21% for 2018 and 35% for 2017 to income before income taxes for the three months ended September 30, 2018 and 2017 due to the following (in thousands):
1Certain amounts have been reclassified within the schedule above for comparative purposes. |
Earnings Per Share (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Earnings Per Share, Basic and Diluted | The calculation and reconciliation of basic and diluted earnings per share for the three and nine month periods ended September 30 follows (in thousands, except per share data):
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Segments (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Company's Segment Results | The Company’s segment results are as follows for the three and nine month periods ended September 30 (in thousands):
1Reflects the impact of the Company's adoption of ASC 606 and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effect of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect ASC 606. 2The results from our Cambridge business acquired in the third quarter of 2017 are reported in our North America segment. As we have concluded that this business is part of our North America segment, the results for this business have been recast from International segment into our North America segment for the three and nine month periods ended September 30, 2017. |
Derivative Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The aggregate equivalent U.S. dollar notional amount of foreign exchange derivative customer contracts held by the Company as of September 30, 2018 and December 31, 2017 (in millions) is presented in the table below. Notional amounts do not reflect the netting of offsetting trades, although these offsetting positions may result in minimal overall market risk. Aggregate derivative notional amounts can fluctuate from period to period in the normal course of business based on market conditions, levels of customer activity and other factors.
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Schedule of Derivative Assets at Fair Value | The following table summarizes the fair value of derivatives reported in the Unaudited Consolidated Balance Sheet as of September 30, 2018 and December 31, 2017 (in millions):
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Schedule of Derivative Liabilities at Fair Value | The following table summarizes the fair value of derivatives reported in the Unaudited Consolidated Balance Sheet as of September 30, 2018 and December 31, 2017 (in millions):
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Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||||
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Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Jan. 01, 2018 |
Dec. 31, 2017 |
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Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||
Foreign exchange gains (losses) | $ (200) | $ 600 | $ 200 | $ (200) | ||||||
Retained earnings | 3,515,657 | [1] | 3,515,657 | [1] | $ 2,958,921 | |||||
Prepaid expenses and other current assets | 202,102 | [1] | 202,102 | [1] | 187,820 | |||||
Other assets | 143,913 | [1] | 143,913 | [1] | 114,962 | |||||
Deferred income taxes | $ 506,310 | [1] | $ 506,310 | [1] | 518,912 | |||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||
Retained earnings | $ 30,900 | |||||||||
Prepaid expenses and other current assets | 10,200 | |||||||||
Other assets | 30,300 | |||||||||
Deferred income taxes | $ 9,600 | |||||||||
Accounting Standards Update 2016-15 | ||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||
Retained earnings | 17,100 | |||||||||
Deferred tax assets | $ 17,100 | |||||||||
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Summary of Significant Accounting Policies - Effect of Topic 606 on Financial Statements (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||
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Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Consolidated Revenues, net | $ 619,586 | [1] | $ 577,877 | $ 1,790,070 | [1] | $ 1,639,547 | |||||
Expenses: | |||||||||||
Merchant commissions | 0 | [1] | 27,687 | 0 | [1] | 82,690 | |||||
Processing | 128,400 | [1] | 111,283 | 356,086 | [1] | 316,429 | |||||
Selling | 44,806 | [1] | 45,060 | 135,926 | [1] | 122,854 | |||||
General and administrative | 98,023 | [1] | 92,054 | 284,718 | [1] | 275,095 | |||||
Depreciation and amortization | 67,267 | [1] | 69,156 | 207,379 | [1] | 198,731 | |||||
Operating income | 281,090 | [1] | 232,637 | 805,961 | [1] | 643,748 | |||||
Total other expense (income) | 43,522 | [1] | (94,865) | 107,899 | [1] | (41,511) | |||||
Income before income taxes | 237,568 | [1] | 327,502 | 698,062 | [1] | 685,259 | |||||
Provision for income taxes | 79,874 | [1] | 124,679 | 188,579 | [1] | 227,756 | |||||
Net income | $ 157,694 | [1] | $ 202,823 | $ 509,483 | [1],[2] | $ 457,503 | [2] | ||||
Basic earnings per share (in dollars per share) | $ 1.78 | [1] | $ 2.23 | $ 5.72 | [1] | $ 4.99 | |||||
Diluted earnings per share (in dollars per share) | $ 1.71 | [1] | $ 2.18 | $ 5.50 | [1] | $ 4.87 | |||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Consolidated Revenues, net | $ 27,958 | $ 75,513 | |||||||||
Expenses: | |||||||||||
Merchant commissions | 30,909 | 84,199 | |||||||||
Processing | (2,498) | (7,282) | |||||||||
Selling | 875 | 3,392 | |||||||||
General and administrative | 0 | 0 | |||||||||
Depreciation and amortization | 0 | 0 | |||||||||
Operating income | (1,328) | (4,796) | |||||||||
Total other expense (income) | 0 | 0 | |||||||||
Income before income taxes | (1,328) | (4,796) | |||||||||
Provision for income taxes | (498) | (1,346) | |||||||||
Net income | $ (830) | $ (3,450) | |||||||||
Basic earnings per share (in dollars per share) | $ (0.01) | $ (0.04) | |||||||||
Diluted earnings per share (in dollars per share) | $ (0.01) | $ (0.04) | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Consolidated Revenues, net | $ 647,544 | $ 1,865,583 | |||||||||
Expenses: | |||||||||||
Merchant commissions | 30,909 | 84,199 | |||||||||
Processing | 125,902 | 348,804 | |||||||||
Selling | 45,681 | 139,318 | |||||||||
General and administrative | 98,023 | 284,718 | |||||||||
Depreciation and amortization | 67,267 | 207,379 | |||||||||
Operating income | 279,762 | 801,165 | |||||||||
Total other expense (income) | 43,522 | 107,899 | |||||||||
Income before income taxes | 236,240 | 693,266 | |||||||||
Provision for income taxes | 79,376 | 187,233 | |||||||||
Net income | $ 156,864 | $ 506,033 | |||||||||
Basic earnings per share (in dollars per share) | $ 1.77 | $ 5.68 | |||||||||
Diluted earnings per share (in dollars per share) | $ 1.70 | $ 5.46 | |||||||||
|
Accounts Receivable - Additional Information (Details) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Nov. 14, 2017 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Maximum undivided ownership interest pooled accounts receivable amount sold | $ 1,200,000,000 | |
Securitization Facility | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Securitized accounts receivable facility | $ 1,200,000,000 | $ 1,200,000,000 |
Accounts Receivable - Company's Accounts Receivable and Securitized Accounts Receivable (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
|||
---|---|---|---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total gross receivables | $ 2,794,361 | $ 2,277,042 | |||||
Gross domestic securitized accounts receivable | 931,000 | [1] | 811,000 | ||||
Less allowance for doubtful accounts | (52,022) | (46,031) | $ (47,779) | $ (32,506) | |||
Net accounts and securitized accounts receivable | 2,742,339 | 2,231,011 | |||||
Gross domestic accounts receivable | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total gross receivables | 951,331 | 661,677 | |||||
Gross foreign receivables | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Total gross receivables | $ 912,030 | $ 804,365 | |||||
|
Accounts Receivable - Allowance for Doubtful Accounts Related to Accounts Receivable (Details) - USD ($) $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Allowance for doubtful accounts beginning of period | $ 46,031 | $ 32,506 | ||
Provision for bad debts | [1] | 43,520 | 35,949 | |
Write-offs | (37,529) | (20,676) | ||
Allowance for doubtful accounts end of period | $ 52,022 | $ 47,779 | ||
|
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
[2] | Dec. 31, 2017 |
|||||||
Assets: | ||||||||||||
Foreign exchange contracts | $ 28,300 | $ 28,300 | $ 39,000 | |||||||||
Total assets | 605,590 | 605,590 | 517,723 | |||||||||
Cash collateral for foreign exchange contracts | 26,500 | 26,500 | 12,500 | |||||||||
Liabilities: | ||||||||||||
Foreign exchange contracts | 28,600 | 28,600 | 26,900 | |||||||||
Total liabilities | 28,626 | 28,626 | 26,888 | |||||||||
Cash collateral obligation for foreign exchange contracts | 12,300 | 12,300 | 10,900 | |||||||||
Investment loss | 7,147 | [1] | $ 47,766 | 7,147 | [1],[2] | $ 52,497 | ||||||
Foreign exchange contracts | ||||||||||||
Assets: | ||||||||||||
Foreign exchange contracts | 28,293 | 28,293 | 39,045 | |||||||||
Cash collateral for foreign exchange contracts | 26,499 | 26,499 | 12,540 | |||||||||
Liabilities: | ||||||||||||
Foreign exchange contracts | 28,626 | 28,626 | 26,888 | |||||||||
Cash collateral obligation for foreign exchange contracts | 12,307 | 12,307 | 10,882 | |||||||||
Repurchase agreements | ||||||||||||
Assets: | ||||||||||||
Total assets | 526,730 | 526,730 | 420,838 | |||||||||
Money market | ||||||||||||
Assets: | ||||||||||||
Total assets | 50,395 | 50,395 | 50,423 | |||||||||
Certificates of deposit | ||||||||||||
Assets: | ||||||||||||
Total assets | 172 | 172 | 7,417 | |||||||||
Level 1 | ||||||||||||
Assets: | ||||||||||||
Total assets | 0 | 0 | 10 | |||||||||
Liabilities: | ||||||||||||
Total liabilities | 0 | 0 | 67 | |||||||||
Level 1 | Foreign exchange contracts | ||||||||||||
Assets: | ||||||||||||
Foreign exchange contracts | 0 | 0 | 10 | |||||||||
Liabilities: | ||||||||||||
Foreign exchange contracts | 0 | 0 | 67 | |||||||||
Level 2 | ||||||||||||
Assets: | ||||||||||||
Total assets | 605,590 | 605,590 | 517,713 | |||||||||
Liabilities: | ||||||||||||
Total liabilities | 28,626 | 28,626 | 26,821 | |||||||||
Level 2 | Foreign exchange contracts | ||||||||||||
Assets: | ||||||||||||
Foreign exchange contracts | 28,293 | 28,293 | 39,035 | |||||||||
Liabilities: | ||||||||||||
Foreign exchange contracts | 28,626 | 28,626 | 26,821 | |||||||||
Level 2 | Repurchase agreements | ||||||||||||
Assets: | ||||||||||||
Total assets | 526,730 | 526,730 | 420,838 | |||||||||
Level 2 | Money market | ||||||||||||
Assets: | ||||||||||||
Total assets | 50,395 | 50,395 | 50,423 | |||||||||
Level 2 | Certificates of deposit | ||||||||||||
Assets: | ||||||||||||
Total assets | 172 | $ 172 | $ 7,417 | |||||||||
Qui | ||||||||||||
Liabilities: | ||||||||||||
Investment loss | $ 7,100 | |||||||||||
|
Stockholders' Equity - Repurchase Program (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 32 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 27, 2017 |
Feb. 04, 2016 |
Sep. 30, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Jul. 17, 2018 |
Nov. 01, 2017 |
|||
Class of Stock [Line Items] | ||||||||||
Repurchase of common stock | [1] | $ 380,651,000 | $ 402,392,000 | |||||||
Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock repurchase program, approved amount | $ 500,000,000 | $ 1,600,000,000.0 | ||||||||
Stock repurchase program, authorized time period | 18 months | |||||||||
Increase in authorized amount to be repurchased | $ 250,000,000 | $ 500,000,000 | $ 350,000,000 | |||||||
Period in force, extension of original period | 18 months | |||||||||
Remaining authorized repurchase amount | $ 629,200,000 | $ 629,200,000 | $ 629,200,000 | |||||||
Repurchase agreements | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares repurchased | $ 970,800,000 | |||||||||
Shares repurchased (in shares) | 0 | 1,896,106 | 6,010,210 | |||||||
Repurchase of common stock | $ 380,700,000 | |||||||||
|
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Feb. 07, 2018 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Tax benefits recorded on stock based compensation | $ 31.2 | $ 36.1 | ||
Aggregate intrinsic value of options exercisable | $ 626.5 | |||
Weighted average remaining contractual term of options exercisable (in years) | 5 years 2 months 12 days | |||
Minimum | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Period of vesting provisions (in years) | 1 year | |||
Minimum | Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Period of vesting provisions (in years) | 1 year | |||
Maximum | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Period of vesting provisions (in years) | 5 years | |||
Maximum | Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Period of vesting provisions (in years) | 3 years | |||
Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 16,750,000 | 13,250,000 |
Stock-Based Compensation - Summary of Expense Related to Share-Based Payments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 20,702 | $ 24,655 | $ 54,207 | $ 68,897 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | 11,154 | 16,212 | 33,205 | 42,254 |
Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 9,548 | $ 8,443 | $ 21,002 | $ 26,643 |
Stock-Based Compensation - Summary of Total Unrecognized Compensation Cost Related to Stock-Based Compensation (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 82,143 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 68,687 |
Weighted Average Period of Expense Recognition (in Years) | 1 year 4 months 28 days |
Restricted stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 13,456 |
Weighted Average Period of Expense Recognition (in Years) | 6 months 11 days |
Stock-Based Compensation - Summary of Changes in Number of Shares of Common Stock Under Option (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Shares at beginning of period (in shares) | 8,031 | |
Granted (in shares) | 408 | |
Exercised (in shares) | (692) | |
Forfeited (in shares) | (40) | |
Shares at end of period (in shares) | 7,707 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Weighted average exercise price, beginning of period (in dollars per share) | $ 109.78 | |
Weighted average exercise price, granted (in dollars per share) | 204.57 | |
Weighted average exercise price, exercised (in dollars per share) | 71.50 | |
Weighted average exercise price, forfeitures (in dollars per share) | 149.22 | |
Weighted average exercise price, end of period (in dollars per share) | $ 118.03 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Expected to vest (in shares) | 7,707 | |
Weighted average exercise price, expected to vest (in dollars per share) | $ 118.03 | |
Options exercisable at beginning of period (in shares) | 4,588 | 4,029 |
Weighted average exercise price of exercisable options, beginning of period (in dollars per share) | $ 91.27 | $ 75.80 |
Weighted average exercise price of granted options (in dollars per share) | $ 50.04 | |
Aggregate intrinsic value | $ 846,395 | $ 663,815 |
Aggregate intrinsic value, exercised | $ 108,164 |
Stock-Based Compensation - Schedule of Weighted-Average Assumptions (Details) - Stock options |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.57% | 1.65% |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 26.93% | 28.02% |
Expected life (in years) | 3 years 9 months 18 days | 3 years 4 months 24 days |
Stock-Based Compensation - Summary of Changes in Number of Shares of Restricted Stock and Restricted Stock Units (Details) shares in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2018
$ / shares
shares
| |
Shares | |
Shares outstanding, beginning of period (in shares) | shares | 365 |
Granted (in shares) | shares | 104 |
Vested (in shares) | shares | (49) |
Canceled (in shares) | shares | (26) |
Shares outstanding, end of period (in shares) | shares | 394 |
Weighted Average Grant Date Fair Value | |
Weighted average grant date fair value, beginning of period (in dollars per share) | $ / shares | $ 155.58 |
Weighted average grant date fair value, granted (in dollars per share) | $ / shares | 190.18 |
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 157.66 |
Weighted average grant date fair value, canceled (in dollars per share) | $ / shares | 157.39 |
Weighted average grant date fair value, end of period (in dollars per share) | $ / shares | $ 173.21 |
Acquisition - Additional Information (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Aug. 09, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|||||
Business Acquisition [Line Items] | ||||||||
Deferred payments for acquisitions in previous years | [1] | $ 3,799 | $ 602,298 | |||||
Investments in other businesses | 11,192 | [1] | $ 6,327 | [1] | $ 39,000 | |||
Acquisitions Prior to 2018 | ||||||||
Business Acquisition [Line Items] | ||||||||
Deferred payments for acquisitions in previous years | $ 3,800 | |||||||
2017 Acquisitions | ||||||||
Business Acquisition [Line Items] | ||||||||
Aggregate purchase price | 725,100 | |||||||
Cash acquired from acquisition | 96,300 | |||||||
Note payable incurred | 29,300 | |||||||
Cambridge | ||||||||
Business Acquisition [Line Items] | ||||||||
Aggregate purchase price | $ 616,000 | |||||||
Cash acquired from acquisition | 94,500 | |||||||
Note payable incurred | 23,800 | |||||||
Creative Lodging Solutions | ||||||||
Business Acquisition [Line Items] | ||||||||
Aggregate purchase price | 109,100 | |||||||
Cash acquired from acquisition | 1,800 | |||||||
Note payable incurred | 5,500 | |||||||
Non-compete agreements | Cambridge | ||||||||
Business Acquisition [Line Items] | ||||||||
Noncompete agreements | $ 5,800 | |||||||
Non-compete agreements | Creative Lodging Solutions | ||||||||
Business Acquisition [Line Items] | ||||||||
Noncompete agreements | $ 3,900 | |||||||
|
Acquisition - Summary of Purchase Price Allocation (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
[1] | Dec. 31, 2017 |
Aug. 09, 2017 |
||
---|---|---|---|---|---|---|
Business Acquisition [Line Items] | ||||||
Goodwill | $ 4,517,348 | $ 4,715,823 | ||||
Cambridge | ||||||
Business Acquisition [Line Items] | ||||||
Restricted cash | $ 37,666 | |||||
Trade and other receivables | 61,806 | |||||
Prepaid expenses and other | 18,071 | |||||
Property and equipment | 7,106 | |||||
Other long term assets | 10,025 | |||||
Goodwill | 500,212 | |||||
Other intangible assets | 271,793 | |||||
Liabilities assumed | (197,335) | |||||
Deferred tax liabilities | (93,364) | |||||
Aggregate purchase price | $ 615,980 | |||||
Creative Lodging Solutions | ||||||
Business Acquisition [Line Items] | ||||||
Trade and other receivables | 38,038 | |||||
Prepaid expenses and other | 1,426 | |||||
Property and equipment | 5,745 | |||||
Other long term assets | 53,459 | |||||
Goodwill | 59,946 | |||||
Liabilities assumed | (32,274) | |||||
Deferred tax liabilities | (17,217) | |||||
Aggregate purchase price | $ 109,123 | |||||
|
Acquisition - Summary of Preliminary Estimated Fair Value of Intangible Assets Acquired and the Related Estimated Useful Lives (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Aug. 09, 2017 |
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Trade names and trademarks—other | |||
Business Acquisition [Line Items] | |||
Useful Lives (in Years) | 13 years 9 months 18 days | ||
Cambridge | |||
Business Acquisition [Line Items] | |||
Other intangible assets | $ 271,793 | ||
Cambridge | Banking Relationship | |||
Business Acquisition [Line Items] | |||
Useful Lives (in Years) | 20 years | ||
Finite-lived intangible assets | $ 705 | ||
Cambridge | Customer relationships and other identifiable intangible assets | |||
Business Acquisition [Line Items] | |||
Useful Lives (in Years) | 20 years | ||
Other intangible assets | $ 41,749 | ||
Cambridge | Technology | |||
Business Acquisition [Line Items] | |||
Useful Lives (in Years) | 5 years | ||
Other intangible assets | $ 16,039 | ||
Cambridge | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Other intangible assets | $ 178,190 | ||
Cambridge | Customer Relationships | Minimum | |||
Business Acquisition [Line Items] | |||
Useful Lives (in Years) | 7 years | ||
Cambridge | Customer Relationships | Maximum | |||
Business Acquisition [Line Items] | |||
Useful Lives (in Years) | 18 years | ||
Creative Lodging Solutions | Trade names and trademarks—other | |||
Business Acquisition [Line Items] | |||
Useful Lives (in Years) | 1 year | ||
Finite-lived intangible assets | $ 180 | ||
Creative Lodging Solutions | Customer relationships and other identifiable intangible assets | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets | $ 53,459 | ||
Creative Lodging Solutions | Technology | |||
Business Acquisition [Line Items] | |||
Useful Lives (in Years) | 4 years | ||
Finite-lived intangible assets | $ 1,750 | ||
Creative Lodging Solutions | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Useful Lives (in Years) | 8 years | ||
Finite-lived intangible assets | $ 51,529 | ||
Trade names and trademarks—indefinite lived | Cambridge | |||
Business Acquisition [Line Items] | |||
Customer relationships—Accounts Payable Solutions | $ 35,110 |
Goodwill and Other Intangible Assets - Summary of Changes in Goodwill by Reportable Business Segment (Details) $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2018
USD ($)
| ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | $ 4,715,823 | |||
Acquisition Accounting Adjustments | 4,056 | |||
Foreign Currency | (202,531) | |||
Goodwill, ending balance | 4,517,348 | [1] | ||
North America | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | 3,084,123 | |||
Acquisition Accounting Adjustments | 4,036 | |||
Foreign Currency | (7,152) | |||
Goodwill, ending balance | 3,081,007 | |||
International | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | 1,631,700 | |||
Acquisition Accounting Adjustments | 20 | |||
Foreign Currency | (195,379) | |||
Goodwill, ending balance | $ 1,436,341 | |||
|
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands |
9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
||||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amounts | $ 3,346,913 | $ 3,468,241 | |||
Accumulated Amortization | (908,286) | (743,284) | |||
Net Carrying Amount | 2,438,627 | [1] | 2,724,957 | ||
Trade names and trademarks—indefinite lived | |||||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amounts | 476,820 | 499,587 | |||
Accumulated Amortization | 0 | 0 | |||
Net Carrying Amount | $ 476,820 | 499,587 | |||
Customer and vendor relationships | |||||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||||
Weighted- Avg Useful Lives (Years) | 17 years 1 month 6 days | ||||
Gross Carrying Amounts | $ 2,609,056 | 2,698,428 | |||
Accumulated Amortization | (734,726) | (605,347) | |||
Net Carrying Amount | $ 1,874,330 | 2,093,081 | |||
Trade names and trademarks—other | |||||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||||
Weighted- Avg Useful Lives (Years) | 13 years 9 months 18 days | ||||
Gross Carrying Amounts | $ 2,963 | 2,986 | |||
Accumulated Amortization | (2,457) | (2,207) | |||
Net Carrying Amount | $ 506 | 779 | |||
Software | |||||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||||
Weighted- Avg Useful Lives (Years) | 5 years 10 months 24 days | ||||
Gross Carrying Amounts | $ 212,288 | 219,019 | |||
Accumulated Amortization | (144,880) | (116,654) | |||
Net Carrying Amount | $ 67,408 | 102,365 | |||
Non-compete agreements | |||||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||||
Weighted- Avg Useful Lives (Years) | 4 years 2 months 12 days | ||||
Gross Carrying Amounts | $ 45,786 | 48,221 | |||
Accumulated Amortization | (26,223) | (19,076) | |||
Net Carrying Amount | $ 19,563 | $ 29,145 | |||
|
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impact of foreign exchange rates on intangible assets | $ 125,200 | |||
Amortization expense of intangible assets | [1] | $ 165,002 | $ 158,897 | |
|
Debt - Summary of Debt Instruments (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
|||
---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||
Term note payable—domestic, net of discounts | $ 2,892,205 | $ 2,993,667 | |||
Other debt | 39,597 | 43,736 | |||
Total notes payable and other obligations | 3,541,926 | 3,707,616 | |||
Securitization facility | 931,000 | [1] | 811,000 | ||
Total notes payable, credit agreements and Securitization Facility | 4,472,926 | 4,518,616 | |||
Current portion | 1,699,548 | 1,616,512 | |||
Long-term portion | 2,773,378 | [1] | 2,902,104 | ||
Revolving line of credit A Facility—domestic | |||||
Debt Instrument [Line Items] | |||||
Revolving line of credit | 440,000 | 635,000 | |||
Revolving line of credit B Facility—foreign | |||||
Debt Instrument [Line Items] | |||||
Revolving line of credit | 140,717 | 28,334 | |||
Revolving line of credit B Facility—swing line | |||||
Debt Instrument [Line Items] | |||||
Revolving line of credit | $ 29,407 | $ 6,879 | |||
|
Debt - Summary of Debt Instruments Narrative (Details) - USD ($) |
9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
Nov. 14, 2017 |
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Debt Instrument [Line Items] | |||||
Unused facility fee, as percentage of unused portion | 0.30% | ||||
Deferred finance costs | $ 4,300,000 | $ 4,300,000 | |||
Securitization Facility | |||||
Debt Instrument [Line Items] | |||||
Amended securitization facility | 1,200,000,000 | $ 1,200,000,000 | $ 1,200,000,000 | ||
Unused facility fee, as percentage of unused portion | 0.40% | 0.40% | |||
Unamortized debt issuance costs | 1,400,000 | $ 1,400,000 | |||
Program fee | one month LIBOR | ||||
Term Loan A | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility initial borrowing, unamortized debt discount | 4,900,000 | $ 4,900,000 | |||
Term Loan B | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility initial borrowing, unamortized debt discount | $ 600,000 | $ 600,000 | |||
Effective interest rate | 4.24% | ||||
Revolving line of credit A Facility—domestic | |||||
Debt Instrument [Line Items] | |||||
Effective interest rate | 3.74% | ||||
Revolving line of credit B Facility—foreign | |||||
Debt Instrument [Line Items] | |||||
Effective interest rate | 2.23% | ||||
Revolving line of credit B Facility—swing line | |||||
Debt Instrument [Line Items] | |||||
Effective interest rate | 2.20% | ||||
Commercial Paper | Securitization Facility | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.86% | 0.80% | |||
Program fee rate | 2.28% | 1.55% | |||
Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Additional borrowing capacity | $ 750,000,000 | $ 750,000,000 | |||
Secured Debt | Term A Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Amended securitization facility | 1,285,000,000.000 | 1,285,000,000.000 | |||
Unamortized debt issuance costs | 8,000,000 | 8,000,000 | |||
Secured Debt | Term Loan A | |||||
Debt Instrument [Line Items] | |||||
Amended securitization facility | 2,690,000,000.00 | 2,690,000,000.00 | |||
Secured Debt | Term Loan B | |||||
Debt Instrument [Line Items] | |||||
Amended securitization facility | 350,000,000.0 | 350,000,000.0 | |||
Secured Debt | Revolving A Facility | |||||
Debt Instrument [Line Items] | |||||
Amended securitization facility | 800,000,000 | 800,000,000 | |||
Secured Debt | Revolving B Facility | |||||
Debt Instrument [Line Items] | |||||
Amended securitization facility | 450,000,000 | 450,000,000 | |||
Secured Debt | Revolving C Facility | |||||
Debt Instrument [Line Items] | |||||
Amended securitization facility | $ 35,000,000 | $ 35,000,000 | |||
Eurodollar | Secured Debt | Term Loan B | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.00% | ||||
Base Rate | Secured Debt | Term Loan B | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
London Interbank Offered Rate (LIBOR) | Commercial Paper | Securitization Facility | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.90% | ||||
Blended Rate Of LIBOR And Commercial Paper Rates Based On Weighted Average Advance | Commercial Paper | Securitization Facility | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.87% | ||||
Minimum | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Unused facility fee, as percentage of unused portion | 0.20% | ||||
Minimum | Federal Funds Rate Plus | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Maximum | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Unused facility fee, as percentage of unused portion | 0.40% | ||||
Maximum | Eurodollar | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% |
Income taxes - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||
Tax Cuts and Jobs Act of 2017 provisional income tax expense (benefit) | $ (105.5) | $ (128.2) | |
Change in tax rate effect on deferred tax liabilities | 202.9 | 210.0 | |
Transition tax | $ 97.4 | $ 81.8 | |
Income tax expense at federal statutory rate, rate | 21.00% | 35.00% | |
Income Tax Contingency [Line Items] | |||
Adjustment to provisional income tax expense (benefit) | $ 22.7 | ||
State and Local Jurisdiction | |||
Income Tax Contingency [Line Items] | |||
Adjustment to provisional income tax expense (benefit) | $ 9.3 |
Income Taxes - Summary of Provision for Income Taxes and U.S. Federal Tax Rate (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
[1] | Sep. 30, 2017 |
||||
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount [Abstract] | ||||||||
Computed tax expense at the U.S. federal tax rate | $ 49,889 | $ 114,626 | ||||||
Foreign income tax differential | 2,359 | (9,247) | ||||||
Excess tax benefits related to stock-based compensation | (7,562) | (4,360) | ||||||
State taxes net of federal benefits | 3,119 | 5,926 | ||||||
Foreign-sourced nontaxable income | (5,620) | 1,558 | ||||||
Foreign withholding taxes1 | 4,578 | 3,065 | ||||||
GILTI tax, net of foreign tax credits | 5,576 | 0 | ||||||
Valuation allowance on investment loss | 0 | 16,718 | ||||||
Transition tax, net of foreign tax credits | (22,731) | 0 | ||||||
Other1 | 4,804 | (3,607) | ||||||
Provision for income taxes | $ 79,874 | [1] | $ 124,679 | $ 188,579 | $ 227,756 | |||
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||||||
Computed tax expense at the U.S. federal tax rate | 21.00% | 35.00% | ||||||
Foreign income tax differential | 1.00% | (2.80%) | ||||||
Excess tax benefits related to stock-based compensation | (3.20%) | (1.30%) | ||||||
State taxes net of federal benefits | 1.30% | 1.80% | ||||||
Foreign-sourced nontaxable income | (2.40%) | 0.50% | ||||||
Foreign withholding taxes1 | 1.90% | 0.90% | ||||||
GILTI tax, net of foreign tax credits | 2.40% | 0.00% | ||||||
Valuation allowance on investment loss | (0.00%) | 5.10% | ||||||
Transition tax, net of foreign tax credits | (9.60%) | (0.00%) | ||||||
Other1 | 2.00% | (1.10%) | ||||||
Provision for income taxes | 33.60% | 38.10% | ||||||
|
Earnings Per Share - Summary of Earnings Per Share, Basic and Diluted (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
||||||||
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 157,694 | [1] | $ 202,823 | $ 509,483 | [1],[2] | $ 457,503 | [2] | ||||
Denominator for basic earnings per share (in shares) | 88,456 | [1] | 90,751 | 89,126 | [1] | 91,619 | |||||
Dilutive securities (in shares) | 3,625 | 2,250 | 3,545 | 2,304 | |||||||
Denominator for diluted earnings per share (in shares) | 92,081 | [1] | 93,001 | 92,671 | [1] | 93,923 | |||||
Basic earnings per share (in dollars per share) | $ 1.78 | [1] | $ 2.23 | $ 5.72 | [1] | $ 4.99 | |||||
Diluted earnings per share (in dollars per share) | $ 1.71 | [1] | $ 2.18 | $ 5.50 | [1] | $ 4.87 | |||||
|
Earnings Per Share - Additional Information (Detail) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 0.1 | 3.5 |
Performance Based Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 0.2 | 0.3 |
Segments - Additional Information (Detail) |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2018
USD ($)
|
[1] |
Sep. 30, 2017
USD ($)
|
Sep. 30, 2018
USD ($)
segment
|
Sep. 30, 2017
USD ($)
|
||||
Segment Reporting Information [Line Items] | ||||||||
Number of reportable segments | segment | 2 | |||||||
Intersegment sales | $ 619,586,000 | $ 577,877,000 | $ 1,790,070,000 | [1] | $ 1,639,547,000 | |||
Intersegment Eliminations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Intersegment sales | $ 0 | |||||||
|
Segments - Schedule of Company's Segment Results (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues, net | $ 619,586 | [1] | $ 577,877 | $ 1,790,070 | [1] | $ 1,639,547 | |||||
Operating income | 281,090 | [1] | 232,637 | 805,961 | [1] | 643,748 | |||||
Depreciation and amortization | 67,267 | [1] | 69,156 | 207,379 | [1] | 198,731 | |||||
Capital expenditures | 21,698 | 16,859 | 56,312 | [2] | 49,459 | [2] | |||||
North America | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues, net | 412,816 | 368,006 | 1,148,034 | 1,040,949 | |||||||
Operating income | 177,769 | 138,480 | 495,095 | 394,378 | |||||||
Depreciation and amortization | 39,049 | 38,399 | 116,041 | 104,960 | |||||||
Capital expenditures | 12,604 | 9,167 | 32,700 | 30,901 | |||||||
International | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues, net | 206,770 | 209,871 | 642,036 | 598,598 | |||||||
Operating income | 103,321 | 94,157 | 310,866 | 249,370 | |||||||
Depreciation and amortization | 28,218 | 30,757 | 91,338 | 93,771 | |||||||
Capital expenditures | $ 9,094 | $ 7,692 | $ 23,612 | $ 18,558 | |||||||
|
Asset Dispositions (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Oct. 31, 2018 |
Jul. 27, 2017 |
|
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Gain on disposal | $ 0 | $ 174,984 | |||
NexTraq | Held-for-sale | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Consideration | $ 316,000 | ||||
Gain on disposal | $ 175,000 | ||||
Tax effect of gain from disposal | $ 65,800 | ||||
Subsequent Event | Chevron | Held-for-sale | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Expected consideration | $ 160,000 |
Derivative Financial Instruments Schedule of Notional Amounts (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivative [Line Items] | ||
Foreign exchange contracts | $ 8,705.0 | $ 9,038.1 |
Swaps | ||
Derivative [Line Items] | ||
Foreign exchange contracts | 330.4 | 515.4 |
Futures, forwards and spot | ||
Derivative [Line Items] | ||
Foreign exchange contracts | 2,905.7 | 3,274.5 |
Written options | ||
Derivative [Line Items] | ||
Foreign exchange contracts | 3,033.1 | 2,934.2 |
Purchased options | ||
Derivative [Line Items] | ||
Foreign exchange contracts | $ 2,435.8 | $ 2,314.1 |
Derivative Financial Instruments Schedule of Fair Value by Balance Sheet Location (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Derivative assets, gross fair value | $ 75.3 | $ 80.4 |
Cash collateral | 26.5 | 12.5 |
Derivative asset, fair value, gross, net of cash collateral | 48.8 | 67.9 |
Derivative liabilities, gross fair value | 75.6 | 68.3 |
Cash collateral | 12.3 | 10.9 |
Derivative liabilities, fair value, gross, net of cash collateral | 63.3 | 57.4 |
Foreign exchange contracts | 28.3 | 39.0 |
Derivative assets, net | 1.8 | 26.5 |
Foreign exchange contracts | 28.6 | 26.9 |
Derivative liabilities, net | 16.3 | 16.0 |
Over the counter | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, gross fair value | 75.3 | 80.4 |
Derivative liabilities, gross fair value | 75.6 | 68.2 |
Foreign exchange contracts | 28.3 | 39.0 |
Foreign exchange contracts | 28.6 | 26.8 |
Exchange traded | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, gross fair value | 0.0 | 0.0 |
Derivative liabilities, gross fair value | 0.0 | 0.1 |
Foreign exchange contracts | 0.0 | 0.0 |
Foreign exchange contracts | $ 0.0 | $ 0.1 |
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