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 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Class | Outstanding at November 2, 2020 | |||||||
Common Stock, $0.001 par value |
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, 2020 | December 31, 2019 | |||||||||||||
(Unaudited) | ||||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Accounts and other receivables (less allowance for credit losses of $ | ||||||||||||||
Securitized accounts receivable—restricted for securitization investors | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property and equipment, net | ||||||||||||||
Goodwill | ||||||||||||||
Other intangibles, net | ||||||||||||||
Investments | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and stockholders’ equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued expenses | ||||||||||||||
Customer deposits | ||||||||||||||
Securitization facility | ||||||||||||||
Current portion of notes payable and lines of credit | ||||||||||||||
Other current liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Notes payable and other obligations, less current portion | ||||||||||||||
Deferred income taxes | ||||||||||||||
Other noncurrent liabilities | ||||||||||||||
Total noncurrent liabilities | ||||||||||||||
Commitments and contingencies (Note 12) | ||||||||||||||
Stockholders’ equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Less treasury stock, | ( | ( | ||||||||||||
Total stockholders’ equity | ||||||||||||||
Total liabilities and stockholders’ equity | $ | $ |
See accompanying notes to unaudited consolidated financial statements. | ||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Revenues, net | $ | $ | $ | $ | ||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||
Processing | ||||||||||||||||||||||||||
Selling | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Other operating, net | ( | ( | ( | ( | ||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||||
Investment loss (gain) | ( | |||||||||||||||||||||||||
Other (income) expense, net | ( | ( | ( | |||||||||||||||||||||||
Interest expense, net | ||||||||||||||||||||||||||
Total other expense | ||||||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||
Basic shares | ||||||||||||||||||||||||||
Diluted shares |
See accompanying notes to unaudited consolidated financial statements. | ||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive loss: | ||||||||||||||||||||||||||
Foreign currency translation losses, net of tax | ( | ( | ( | ( | ||||||||||||||||||||||
Net change in derivative contracts, net of tax | ( | ( | ( | |||||||||||||||||||||||
Total other comprehensive loss | ( | ( | ( | ( | ||||||||||||||||||||||
Total comprehensive income (loss) | $ | $ | $ | ( | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total | |||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Acquisition of common stock | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | |||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | ( | ( | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | ||||||||||||||||||||||||||||||||||
Acquisition of common stock | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | |||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | ( | ( | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Acquisition of common stock | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total | |||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Acquisition of common stock | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | ( | ( | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | ||||||||||||||||||||||||||||||||||
Acquisition of common stock | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Acquisition of common stock | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended September 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
Operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation | ||||||||||||||
Stock-based compensation | ||||||||||||||
Provision for losses on accounts and other receivables | ||||||||||||||
Amortization of deferred financing costs and discounts | ||||||||||||||
Amortization of intangible assets and premium on receivables | ||||||||||||||
Deferred income taxes | ( | |||||||||||||
Investment (gain) loss | ( | |||||||||||||
Other non-cash operating income | ( | ( | ||||||||||||
Changes in operating assets and liabilities (net of acquisitions/dispositions): | ||||||||||||||
Accounts and other receivables | ( | |||||||||||||
Prepaid expenses and other current assets | ( | |||||||||||||
Other assets | ( | |||||||||||||
Accounts payable, accrued expenses and customer deposits | ||||||||||||||
Net cash provided by operating activities | ||||||||||||||
Investing activities | ||||||||||||||
Acquisitions, net of cash acquired | ( | ( | ||||||||||||
Purchases of property and equipment | ( | ( | ||||||||||||
Proceeds from disposal of investment | ||||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Financing activities | ||||||||||||||
Proceeds from issuance of common stock | ||||||||||||||
Repurchase of common stock | ( | ( | ||||||||||||
(Payments) borrowings on securitization facility, net | ( | |||||||||||||
Deferred financing costs paid and debt discount | ( | ( | ||||||||||||
Proceeds from issuance of notes payable | ||||||||||||||
Principal payments on notes payable | ( | ( | ||||||||||||
Borrowings from revolver | ||||||||||||||
Payments on revolver | ( | ( | ||||||||||||
(Payments) borrowings on swing line of credit, net | ( | |||||||||||||
Other | ( | ( | ||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Effect of foreign currency exchange rates on cash | ( | ( | ||||||||||||
Net (decrease) increase in cash and cash equivalents and restricted cash | ( | |||||||||||||
Cash and cash equivalents and restricted cash, beginning of period | ||||||||||||||
Cash and cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
Supplemental cash flow information | ||||||||||||||
Cash paid for interest | $ | $ | ||||||||||||
Cash paid for income taxes | $ | $ |
See accompanying notes to unaudited consolidated financial statements. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Long-term intra-entity gain (loss) | $ | $ | ( | ( | |||||||||||||||||||
Foreign exchange gain |
Revenues, net by Product*1 | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||
2020 | % | 2019 | % | 2020 | % | 2019 | % | ||||||||||||||||||||||||||||||||||||||||
Fuel | $ | % | $ | % | % | % | |||||||||||||||||||||||||||||||||||||||||
Corporate Payments | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||
Tolls | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||
Lodging | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||
Gift | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||
Other | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||
Consolidated revenues, net | $ | % | $ | % | % | % |
1 Reflects certain reclassifications of revenue between product categories as the Company realigned its Corporate Payments business, resulting in reclassification of payroll paycard revenue from Corporate Payments to Other. | ||
*Columns may not calculate due to rounding. |
Revenues, net by Geography* | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||
2020 | % | 2019 | % | 2020 | % | 2019 | % | ||||||||||||||||||||||||||||||||||||||||
United States | $ | % | $ | % | % | % | |||||||||||||||||||||||||||||||||||||||||
Brazil | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||
United Kingdom | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||
Other | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||
Consolidated revenues, net | % | % | % | % |
*Columns may not calculate due to rounding. |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Gross | Offset on the Balance Sheet | Net | Gross | Offset on the Balance Sheet | Net | ||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Accounts Receivable | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Accounts Payable | $ | $ | ( | $ | $ | $ | ( | $ |
September 30, 2020 | December 31, 2019 | |||||||||||||
Gross domestic accounts receivable | $ | $ | ||||||||||||
Gross domestic securitized accounts receivable | ||||||||||||||
Gross foreign receivables | ||||||||||||||
Total gross receivables | ||||||||||||||
Less allowance for credit losses | ( | ( | ||||||||||||
Net accounts and other receivables and securitized accounts receivable | $ | $ |
2020 | 2019 | |||||||||||||
Allowance for credit losses beginning of period | $ | $ | ||||||||||||
Provision for credit losses | ||||||||||||||
Write-offs | ( | ( | ||||||||||||
Recoveries | ||||||||||||||
Impact of foreign currency | ( | ( | ||||||||||||
Allowance for credit losses end of period | $ | $ |
Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Repurchase agreements | $ | $ | $ | $ | ||||||||||||||||||||||
Money market | ||||||||||||||||||||||||||
Certificates of deposit | ||||||||||||||||||||||||||
Foreign exchange derivative contracts | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Cash collateral for foreign exchange derivative contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | |||||||||||||||||||||||
Foreign exchange derivative contracts | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
Cash collateral obligation for foreign exchange derivative contracts | $ | $ | $ | $ | ||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Repurchase agreements | $ | $ | $ | $ | ||||||||||||||||||||||
Money market | ||||||||||||||||||||||||||
Certificates of deposit | ||||||||||||||||||||||||||
Trading Securities | ||||||||||||||||||||||||||
Foreign exchange derivative contracts | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Cash collateral for foreign exchange derivative contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign exchange derivative contracts | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
Cash collateral obligation for foreign exchange derivative contracts | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Stock options | $ | $ | $ | $ | ||||||||||||||||||||||
Restricted stock | ||||||||||||||||||||||||||
Stock-based compensation | $ | $ | $ | $ |
Unrecognized Compensation Cost | Weighted Average Period of Expense Recognition (in Years) | |||||||||||||
Stock options | $ | |||||||||||||
Restricted stock | ||||||||||||||
Total | $ |
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, 2019 | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Granted | $ | |||||||||||||||||||||||||||||||||||||
Exercised | ( | |||||||||||||||||||||||||||||||||||||
Forfeited | ( | |||||||||||||||||||||||||||||||||||||
Outstanding at September 30, 2020 | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Expected to vest as of September 30, 2020 | $ |
September 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
Risk-free interest rate | % | % | ||||||||||||
Dividend yield | ||||||||||||||
Expected volatility | % | % | ||||||||||||
Expected life (in years) |
2019 | ||||||||
Risk-free interest rate | ||||||||
Dividend yield | ||||||||
Expected volatility | ||||||||
Expected life (in years) |
Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Outstanding at December 31, 2019 | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Canceled or forfeited | ( | |||||||||||||
Outstanding at September 30, 2020 | $ |
Accounts and other receivables | $ | ||||
Prepaid expenses and other current assets | |||||
Property and equipment | |||||
Other assets | |||||
Goodwill | |||||
Other intangibles | |||||
Current liabilities | ( | ||||
Other noncurrent liabilities | ( | ||||
Aggregate purchase price | $ |
Useful Lives (in Years) | Value | |||||||
Trade Name and Trademarks | $ | |||||||
Licensed Software and Technology | ||||||||
Proprietary Technology | ||||||||
Supplier Network | ||||||||
Customer Relationships | ||||||||
$ |
Accounts and other receivables | $ | ||||
Prepaid expenses and other current assets | |||||
Property and equipment | |||||
Other assets | |||||
Goodwill | |||||
Other intangibles | |||||
Current liabilities | ( | ||||
Other noncurrent liabilities | ( | ||||
Deferred income taxes | ( | ||||
Aggregate purchase price | $ |
Useful Lives (in Years) | Value | |||||||
Trade Name and Trademarks | Indefinite | $ | ||||||
Proprietary Technology | ||||||||
Referral Partners | ||||||||
Supplier Network | ||||||||
Customer Relationships | ||||||||
$ |
Accounts and other receivables | $ | ||||
Prepaid expenses and other current assets | |||||
Property and equipment | |||||
Other assets | |||||
Goodwill | |||||
Other intangibles | |||||
Current liabilities | ( | ||||
Other noncurrent liabilities | ( | ||||
Deferred taxes | ( | ||||
Aggregate purchase price | $ |
December 31, 2019 | Acquisitions | Acquisition Accounting Adjustments | Foreign Currency | September 30, 2020 | ||||||||||||||||||||||||||||
Segment | ||||||||||||||||||||||||||||||||
North America | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Brazil | ( | |||||||||||||||||||||||||||||||
International | ( | |||||||||||||||||||||||||||||||
$ | $ | $ | $ | ( | $ |
September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
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 | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Trade names and trademarks—indefinite lived | N/A | — | — | |||||||||||||||||||||||||||||||||||||||||
Trade names and trademarks—other | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Software | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Non-compete agreements | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Total other intangibles | $ | $ | ( | $ | $ | $ | ( | $ |
September 30, 2020 | December 31, 2019 | |||||||||||||
Term Loan A note payable (a), net of discounts | $ | $ | ||||||||||||
Term Loan B note payable (a), net of discounts | ||||||||||||||
Revolving line of credit A Facility(a) | ||||||||||||||
Revolving line of credit B Facility(a) | ||||||||||||||
Revolving line of credit A Facility - domestic swing line (a) | ||||||||||||||
Revolving line of credit B Facility - foreign swing line (a) | ||||||||||||||
Other debt(c) | ||||||||||||||
Total notes payable and other obligations | ||||||||||||||
Securitization Facility(b) | ||||||||||||||
Total notes payable, credit agreements and Securitization Facility | $ | $ | ||||||||||||
Current portion | $ | $ | ||||||||||||
Long-term portion | ||||||||||||||
Total notes payable, credit agreements and Securitization Facility | $ | $ |
2020 | 2019 | |||||||||||||||||||||||||
Computed “expected” tax expense | $ | % | $ | % | ||||||||||||||||||||||
Changes resulting from: | ||||||||||||||||||||||||||
Foreign income tax differential | ( | ( | % | ( | ( | % | ||||||||||||||||||||
Excess tax benefit related to stock-based compensation | ( | ( | % | ( | ( | % | ||||||||||||||||||||
State taxes net of federal benefits | % | % | ||||||||||||||||||||||||
Foreign-sourced nontaxable income | % | ( | % | |||||||||||||||||||||||
Foreign withholding | % | % | ||||||||||||||||||||||||
GILTI, net of foreign tax credits | % | % | ||||||||||||||||||||||||
Other | % | % | ||||||||||||||||||||||||
Provision for income taxes | $ | % | $ | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Denominator for basic earnings per share | ||||||||||||||||||||||||||
Dilutive securities | ||||||||||||||||||||||||||
Denominator for diluted earnings per share | ||||||||||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Revenues, net: | ||||||||||||||||||||||||||
North America | $ | $ | $ | $ | ||||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||
International | ||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
Operating income: | ||||||||||||||||||||||||||
North America | $ | $ | $ | $ | ||||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||
International | ||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
Depreciation and amortization: | ||||||||||||||||||||||||||
North America | $ | $ | $ | $ | ||||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||
International | ||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
Capital expenditures: | ||||||||||||||||||||||||||
North America | $ | $ | $ | $ | ||||||||||||||||||||||
Brazil | ||||||||||||||||||||||||||
International | ||||||||||||||||||||||||||
$ | $ | $ | $ |
Notional | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Foreign exchange contracts: | |||||||||||
Swaps | $ | $ | |||||||||
Futures, forwards and spot | |||||||||||
Written options | |||||||||||
Purchased options | |||||||||||
Total | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
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: | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Cash collateral | |||||||||||||||||||||||||||||||||||||||||||||||
Total net of cash collateral | $ | $ | $ | $ | $ | $ | $ | $ |
Notional Amount as of September 30, 2020 | Fixed Rates | Maturity Date | ||||||||||||||||||
Interest Rate Derivative: | ||||||||||||||||||||
Interest Rate Swap | $ | 1/31/2022 | ||||||||||||||||||
Interest Rate Swap | 1/31/2023 | |||||||||||||||||||
Interest Rate Swap | 12/19/2023 |
As of September 30, 2020 | ||||||||||||||
Balance Sheet Classification | Fair Value | |||||||||||||
Derivatives designated as cash flow hedges: | ||||||||||||||
Swap contracts | Other liabilities | $ |
2020 | ||||||||
Interest Rate Swaps: | ||||||||
Amount of loss recognized in other comprehensive income (loss) on derivatives, net of tax of $ | $ | |||||||
Amount of loss reclassified from accumulated other comprehensive loss into interest expense |
Cumulative Foreign Currency Translation | Unrealized Gains/Losses on Swap Contracts | Total Accumulated Other Comprehensive (Loss) Income | ||||||||||||||||||
Balance at January 1, 2020 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Other comprehensive loss before reclassifications | ( | ( | ( | |||||||||||||||||
Amounts reclassified from AOCI | ||||||||||||||||||||
Tax effect | ||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | |||||||||||||||||
Balance at September 30, 2020 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Cumulative Foreign Currency Translation | Unrealized Gains/Losses on Swap Contracts | Total Accumulated Other Comprehensive (Loss) Income | ||||||||||||||||||
Balance at January 1, 2019 | $ | ( | $ | $ | ( | |||||||||||||||
Other comprehensive loss before reclassifications | ( | ( | ( | |||||||||||||||||
Amounts reclassified from AOCI | ||||||||||||||||||||
Tax effect | ||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | |||||||||||||||||
Balance at September 30, 2019 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||
(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 | $ | 383.8 | 65.6 | % | $ | 442.7 | 65.0 | % | $ | 1,176.0 | 66.4 | % | $ | 1,257.5 | 64.5 | % | |||||||||||||||||||||||||||||||||||||
Brazil | 79.6 | 13.6 | % | 106.6 | 15.6 | % | 253.7 | 14.3 | % | 315.9 | 16.2 | % | |||||||||||||||||||||||||||||||||||||||||
International | 121.9 | 20.8 | % | 131.8 | 19.4 | % | 341.9 | 19.3 | % | 376.6 | 19.3 | % | |||||||||||||||||||||||||||||||||||||||||
$ | 585.3 | 100.0 | % | $ | 681.0 | 100.0 | % | $ | 1,771.5 | 100.0 | % | $ | 1,950.0 | 100.0 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(Unaudited) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Revenues, net | $ | 585.3 | $ | 681.0 | $ | 1,771.5 | $ | 1,950.0 | ||||||||||||||||||
Net income | $ | 188.8 | $ | 225.8 | $ | 494.4 | $ | 659.6 | ||||||||||||||||||
Net income per diluted share | $ | 2.19 | $ | 2.49 | $ | 5.68 | $ | 7.33 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(Unaudited) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Adjusted net income | $ | 241.9 | $ | 280.6 | $ | 703.9 | $ | 775.7 | ||||||||||||||||||
Adjusted net income per diluted share | $ | 2.80 | $ | 3.10 | $ | 8.09 | $ | 8.62 |
As Reported | Pro Forma and Macro Adjusted3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | 2020 | 2019 | Change | % Change | 2020 | 2019 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
FUEL | ||||||||||||||||||||||||||||||||||||||||||||||||||
'- Revenues, net | $ | 255.1 | $ | 295.6 | $ | (40.5) | (14) | % | $ | 262.4 | $ | 295.6 | $ | (33.2) | (11) | % | ||||||||||||||||||||||||||||||||||
'- Transactions | 113.6 | 129.4 | (15.8) | (12) | % | 113.6 | 129.4 | (15.8) | (12) | % | ||||||||||||||||||||||||||||||||||||||||
'- Revenues, net per transaction | $ | 2.25 | $ | 2.28 | $ | (0.04) | (2) | % | $ | 2.31 | $ | 2.28 | $ | 0.03 | 1 | % | ||||||||||||||||||||||||||||||||||
CORPORATE PAYMENTS | ||||||||||||||||||||||||||||||||||||||||||||||||||
'- Revenues, net1 | $ | 106.5 | $ | 120.0 | $ | (13.5) | (11) | % | $ | 106.5 | $ | 120.0 | $ | (13.4) | (11) | % | ||||||||||||||||||||||||||||||||||
'- Spend volume | $ | 15,567 | $ | 19,033 | $ | (3,466) | (18) | % | $ | 15,567 | $ | 19,033 | $ | (3,466) | (18) | % | ||||||||||||||||||||||||||||||||||
'- Revenue, net per spend $ | 0.68 | % | 0.63 | % | 0.05 | % | 9 | % | 0.68 | % | 0.63 | % | 0.05 | % | 9 | % | ||||||||||||||||||||||||||||||||||
TOLLS | ||||||||||||||||||||||||||||||||||||||||||||||||||
'- Revenues, net | $ | 67.6 | $ | 88.7 | $ | (21.1) | (24) | % | $ | 91.6 | $ | 88.7 | $ | 2.9 | 3 | % | ||||||||||||||||||||||||||||||||||
'- Tags (average monthly) | 5.4 | 5.1 | 0.3 | 5 | % | 5.4 | 5.1 | 0.3 | 5 | % | ||||||||||||||||||||||||||||||||||||||||
'- Revenues, net per tag | $ | 12.60 | $ | 17.43 | $ | (4.83) | (28) | % | $ | 17.06 | $ | 17.43 | $ | (0.37) | (2) | % | ||||||||||||||||||||||||||||||||||
LODGING | ||||||||||||||||||||||||||||||||||||||||||||||||||
'- Revenues, net | $ | 52.9 | $ | 56.4 | $ | (3.5) | (6) | % | $ | 52.9 | $ | 78.2 | $ | (25.3) | (32) | % | ||||||||||||||||||||||||||||||||||
'- Room nights | 5.4 | 4.4 | 1.0 | 22 | % | 5.4 | 7.1 | (1.7) | (24) | % | ||||||||||||||||||||||||||||||||||||||||
'- Revenues, net per room night | $ | 9.77 | $ | 12.74 | $ | (2.97) | (23) | % | $ | 9.77 | $ | 10.94 | $ | (1.16) | (11) | % | ||||||||||||||||||||||||||||||||||
GIFT | ||||||||||||||||||||||||||||||||||||||||||||||||||
'- Revenues, net | $ | 39.1 | $ | 48.5 | $ | (9.4) | (19) | % | $ | 39.1 | $ | 48.5 | $ | (9.4) | (19) | % | ||||||||||||||||||||||||||||||||||
'- Transactions | 242.7 | 277.8 | (35.1) | (13) | % | 242.7 | 277.8 | (35.1) | (13) | % | ||||||||||||||||||||||||||||||||||||||||
'- Revenues, net per transaction | $ | 0.16 | $ | 0.17 | $ | (0.01) | (8) | % | $ | 0.16 | $ | 0.17 | $ | (0.01) | (8) | % | ||||||||||||||||||||||||||||||||||
OTHER2 | ||||||||||||||||||||||||||||||||||||||||||||||||||
'- Revenues, net1 | $ | 64.1 | $ | 71.9 | $ | (7.8) | (11) | % | $ | 65.6 | $ | 71.9 | $ | (6.4) | (9) | % | ||||||||||||||||||||||||||||||||||
'- Transactions1 | 9.9 | 14.6 | (4.7) | (32) | % | 9.9 | 14.6 | (4.7) | (32) | % | ||||||||||||||||||||||||||||||||||||||||
'- Revenues, net per transaction | $ | 6.48 | $ | 4.93 | $ | 1.55 | 31 | % | $ | 6.63 | $ | 4.93 | $ | 1.69 | 34 | % | ||||||||||||||||||||||||||||||||||
FLEETCOR CONSOLIDATED REVENUES, NET | ||||||||||||||||||||||||||||||||||||||||||||||||||
'- Revenues, net | $ | 585.3 | $ | 681.0 | $ | (95.8) | (14) | % | $ | 618.0 | $ | 702.9 | $ | (84.9) | (12) | % |
1 Reflects certain reclassifications of revenue between product categories as the Company realigned its Corporate Payments business, resulting in reclassification of payroll paycard revenue from Corporate Payments to Other. | ||
2 Other includes telematics, maintenance, food, transportation and payroll card related businesses. | ||
3 See heading entitled "Managements' Use of Non-GAAP Financial Measures" for a reconciliation of pro forma and macro adjusted revenue by product and metric non-GAAP measures to the comparable financial measure calculated in accordance with GAAP. | ||
* Columns may not calculate due to rounding. |
(Unaudited) | Three Months Ended September 30, 2020 | % of Total Revenues, net | Three Months Ended September 30, 2019 | % of Total Revenues, net | Increase (decrease) | % Change | ||||||||||||||||||||||||||||||||
Revenues, net: | ||||||||||||||||||||||||||||||||||||||
North America | $ | 383.8 | 65.6 | % | $ | 442.7 | 65.0 | % | $ | (58.9) | (13.3) | % | ||||||||||||||||||||||||||
Brazil | 79.6 | 13.6 | % | 106.6 | 15.6 | % | (27.0) | (25.3) | % | |||||||||||||||||||||||||||||
International | 121.9 | 20.8 | % | 131.8 | 19.4 | % | (9.9) | (7.5) | % | |||||||||||||||||||||||||||||
Total revenues, net | 585.3 | 100.0 | % | 681.0 | 100.0 | % | (95.8) | (14.1) | % | |||||||||||||||||||||||||||||
Consolidated operating expenses: | ||||||||||||||||||||||||||||||||||||||
Processing | 119.9 | 20.5 | % | 135.0 | 19.8 | % | (15.2) | (11.2) | % | |||||||||||||||||||||||||||||
Selling | 46.8 | 8.0 | % | 51.8 | 7.6 | % | (5.0) | (9.7) | % | |||||||||||||||||||||||||||||
General and administrative | 90.9 | 15.5 | % | 98.1 | 14.4 | % | (7.2) | (7.3) | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 63.5 | 10.8 | % | 67.3 | 9.9 | % | (3.9) | (5.7) | % | |||||||||||||||||||||||||||||
Other operating, net | (0.2) | — | % | (0.3) | — | % | (0.1) | (28) | % | |||||||||||||||||||||||||||||
Operating income | 264.5 | 45.2 | % | 329.1 | 48.3 | % | (64.6) | (19.6) | % | |||||||||||||||||||||||||||||
Investment loss | 1.3 | 0.2 | % | — | — | % | 1.3 | NM | ||||||||||||||||||||||||||||||
Other (income) expense, net | (3.6) | (0.6) | % | (0.1) | — | % | 3.5 | NM | ||||||||||||||||||||||||||||||
Interest expense, net | 31.4 | 5.4 | % | 36.5 | 5.4 | % | (5.1) | (14.0) | % | |||||||||||||||||||||||||||||
Provision for income taxes | 46.6 | 8.0 | % | 67.0 | 9.8 | % | (20.4) | (30.4) | % | |||||||||||||||||||||||||||||
Net income | $ | 188.8 | 32.3 | % | $ | 225.8 | 33.2 | % | $ | (37.0) | (16.4) | % | ||||||||||||||||||||||||||
Operating income for segments: | ||||||||||||||||||||||||||||||||||||||
North America | $ | 153.3 | $ | 205.6 | $ | (52.2) | (25.4) | % | ||||||||||||||||||||||||||||||
Brazil | 35.6 | 42.5 | (6.9) | (16.2) | % | |||||||||||||||||||||||||||||||||
International | 75.6 | 81.1 | (5.5) | (6.8) | % | |||||||||||||||||||||||||||||||||
Operating income | $ | 264.5 | $ | 329.1 | $ | (64.6) | (19.6) | % | ||||||||||||||||||||||||||||||
Operating margin for segments: | ||||||||||||||||||||||||||||||||||||||
North America | 39.9 | % | 46.4 | % | (6.5) | % | ||||||||||||||||||||||||||||||||
Brazil | 44.7 | % | 39.8 | % | 4.9 | % | ||||||||||||||||||||||||||||||||
International | 62.0 | % | 61.6 | % | 0.5 | % | ||||||||||||||||||||||||||||||||
Consolidated | 45.2 | % | 48.3 | % | (3.1) | % |
Three Months Ended September 30, | ||||||||||||||||||||||||||
Revenues, net by Geography* | 2020 | 2019 | ||||||||||||||||||||||||
(Unaudited) | Revenues, net | % of Total Revenues, net | Revenues, net | % of Total Revenues, net | ||||||||||||||||||||||
United States | $ | 357 | 61 | % | $ | 414 | 61 | % | ||||||||||||||||||
Brazil | 80 | 14 | % | 106 | 16 | % | ||||||||||||||||||||
United Kingdom | 70 | 12 | % | 68 | 10 | % | ||||||||||||||||||||
Other | 78 | 13 | % | 93 | 14 | % | ||||||||||||||||||||
Consolidated revenues, net | $ | 585 | 100 | % | 681 | 100 | % |
Three Months Ended September 30, | ||||||||||||||||||||||||||
Revenues, net by Product Category*1 | 2020 | 2019 | ||||||||||||||||||||||||
(Unaudited) | Revenues, net | % of Total Revenues, net | Revenues, net | % of Total Revenues, net | ||||||||||||||||||||||
Fuel | $ | 255 | 44 | % | $ | 296 | 43 | % | ||||||||||||||||||
Corporate Payments | 107 | 18 | % | 120 | 18 | % | ||||||||||||||||||||
Tolls | 68 | 12 | % | 89 | 13 | % | ||||||||||||||||||||
Lodging | 53 | 9 | % | 56 | 8 | % | ||||||||||||||||||||
Gift | 39 | 7 | % | 48 | 7 | % | ||||||||||||||||||||
Other | 64 | 11 | % | 72 | 11 | % | ||||||||||||||||||||
Consolidated revenues, net | $ | 585 | 100 | % | $ | 681 | 100 | % |
1 Reflects certain reclassifications of revenue between product categories as the Company realigned its Corporate Payments business, resulting in reclassification of payroll paycard revenue from Corporate Payments to Other. | ||
*Columns may not calculate due to rounding. |
Three Months Ended September 30, | ||||||||||||||
(Unaudited) | 2020 | 2019 | ||||||||||||
Term loan A | 1.66 | % | 3.73 | % | ||||||||||
Term loan B | 1.91 | % | 4.25 | % | ||||||||||
Revolving line of credit A, B & C USD Borrowings | 1.67 | % | 3.87 | % | ||||||||||
Revolving line of credit B GBP Borrowings | 1.57 | % | 2.21 | % | ||||||||||
Foreign swing line | 1.55 | % | 2.17 | % |
(Unaudited) | Nine Months Ended September 30, 2020 | % of Total Revenues, net | Nine Months Ended September 30, 2019 | % of Total Revenues, net | Increase (decrease) | % Change | ||||||||||||||||||||||||||||||||
Revenues, net: | ||||||||||||||||||||||||||||||||||||||
North America | $ | 1,176.0 | 66.4 | % | $ | 1,257.5 | 64.5 | % | $ | (81.6) | (6.5) | % | ||||||||||||||||||||||||||
Brazil | 253.7 | 14.3 | % | 315.9 | 16.2 | % | (62.1) | (19.7) | % | |||||||||||||||||||||||||||||
International | 341.9 | 19.3 | % | 376.6 | 19.3 | % | (34.7) | (9.2) | % | |||||||||||||||||||||||||||||
Total revenues, net | 1,771.5 | 100.0 | % | 1,950.0 | 100.0 | % | (178.4) | (9.2) | % | |||||||||||||||||||||||||||||
Consolidated operating expenses: | ||||||||||||||||||||||||||||||||||||||
Processing | 474.8 | 26.8 | % | 384.6 | 19.7 | % | 90.3 | 23.5 | % | |||||||||||||||||||||||||||||
Selling | 145.0 | 8.2 | % | 152.9 | 7.8 | % | (7.9) | (5.2) | % | |||||||||||||||||||||||||||||
General and administrative | 283.7 | 16.0 | % | 297.6 | 15.3 | % | (13.9) | (4.7) | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 190.1 | 10.7 | % | 205.7 | 10.5 | % | (15.6) | (7.6) | % | |||||||||||||||||||||||||||||
Other operating, net | (0.5) | — | % | (1.5) | (0.1) | % | (1.0) | (67.4) | % | |||||||||||||||||||||||||||||
Operating income | 678.3 | 38.3 | % | 910.6 | 46.7 | % | (232.3) | (25.5) | % | |||||||||||||||||||||||||||||
Investment (gain) loss | (30.0) | (1.7) | % | 15.7 | 0.8 | % | (45.7) | NM | ||||||||||||||||||||||||||||||
Other (income) expense, net | (10.5) | (0.6) | % | 0.6 | — | % | (11.1) | NM | ||||||||||||||||||||||||||||||
Interest expense, net | 99.5 | 5.6 | % | 115.1 | 5.9 | % | (15.6) | (13.6) | % | |||||||||||||||||||||||||||||
Provision for income taxes | 125.0 | 7.1 | % | 119.7 | 6.1 | % | 5.3 | 4.4 | % | |||||||||||||||||||||||||||||
Net income | $ | 494.4 | 27.9 | % | $ | 659.6 | 33.8 | % | $ | (165.2) | (25.0) | % | ||||||||||||||||||||||||||
Operating income for segments: | ||||||||||||||||||||||||||||||||||||||
North America | $ | 372.2 | $ | 562.2 | $ | (190.0) | (33.8) | % | ||||||||||||||||||||||||||||||
Brazil | 104.5 | 126.9 | (22.4) | (17.7) | % | |||||||||||||||||||||||||||||||||
International | 201.6 | 221.5 | (19.9) | (9.0) | % | |||||||||||||||||||||||||||||||||
Operating income | $ | 678.3 | $ | 910.6 | $ | (232.3) | (25.5) | % | ||||||||||||||||||||||||||||||
Operating margin for segments: | ||||||||||||||||||||||||||||||||||||||
North America | 31.7 | % | 44.7 | % | (13.1) | % | ||||||||||||||||||||||||||||||||
Brazil | 41.2 | % | 40.2 | % | 1.0 | % | ||||||||||||||||||||||||||||||||
International | 59.0 | % | 58.8 | % | 0.2 | % | ||||||||||||||||||||||||||||||||
Consolidated | 38.3 | % | 46.7 | % | (8.4) | % |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
Revenues, net by Geography* | 2020 | 2019 | ||||||||||||||||||||||||
(Unaudited) | Revenues, net | % of total revenues, net | Revenues, net | % of total revenues, net | ||||||||||||||||||||||
United States | $ | 1,090 | 62 | % | $ | 1,174 | 60 | % | ||||||||||||||||||
Brazil | 254 | 14 | % | 316 | 16 | % | ||||||||||||||||||||
United Kingdom | 193 | 11 | % | 205 | 10 | % | ||||||||||||||||||||
Other | 235 | 13 | % | 256 | 13 | % | ||||||||||||||||||||
Consolidated revenues, net | $ | 1,772 | 100 | % | $ | 1,950 | 100 | % |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
Revenues, net by Product Category*1 | 2020 | 2019 | ||||||||||||||||||||||||
(Unaudited) | % of total revenues, net | % of total revenues, net | ||||||||||||||||||||||||
Fuel | $ | 797 | 45 | % | $ | 874 | 45 | % | ||||||||||||||||||
Corporate Payments | 319 | 18 | % | 329 | 17 | % | ||||||||||||||||||||
Tolls | 215 | 12 | % | 264 | 14 | % | ||||||||||||||||||||
Lodging | 150 | 8 | % | 148 | 8 | % | ||||||||||||||||||||
Gift | 108 | 6 | % | 133 | 7 | % | ||||||||||||||||||||
Other | 182 | 10 | % | 203 | 10 | % | ||||||||||||||||||||
Consolidated revenues, net | $ | 1,772 | 100 | % | $ | 1,950 | 100 | % |
Nine Months Ended September 30, | ||||||||||||||
(Unaudited) | 2020 | 2019 | ||||||||||||
Term loan A | 2.23 | % | 3.89 | % | ||||||||||
Term loan B | 2.53 | % | 4.41 | % | ||||||||||
Revolving line of credit A, B & C USD Borrowings | 2.27 | % | 3.97 | % | ||||||||||
Revolving line of credit B GBP Borrowings | 1.79 | % | 2.22 | % | ||||||||||
Foreign swing line | 1.73 | % | 2.17 | % |
Nine Months Ended September 30, | ||||||||||||||
(Unaudited) | 2020 | 2019 | ||||||||||||
Net cash provided by operating activities | $ | 1,214.7 | $ | 791.1 | ||||||||||
Net cash used in investing activities | (74.6) | (383.5) | ||||||||||||
Net cash used in financing activities | (1,221.9) | (260.5) |
Revenues, net | Key Performance Metric | ||||||||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||||||||
(Unaudited) | 2020* | 2019* | 2020* | 2019* | |||||||||||||||||||||||||
FUEL - TRANSACTIONS | |||||||||||||||||||||||||||||
Pro forma and macro adjusted | $ | 262.4 | $ | 295.6 | 113.6 | 129.4 | |||||||||||||||||||||||
Impact of acquisitions/dispositions | — | — | — | — | |||||||||||||||||||||||||
Impact of fuel prices/spread | (4.5) | — | — | — | |||||||||||||||||||||||||
Impact of foreign exchange rates | (2.8) | — | — | — | |||||||||||||||||||||||||
As reported | $ | 255.1 | $ | 295.6 | 113.6 | 129.4 | |||||||||||||||||||||||
CORPORATE PAYMENTS - SPEND | |||||||||||||||||||||||||||||
Pro forma and macro adjusted | $ | 106.5 | $ | 120.0 | 15,567 | 19,033 | |||||||||||||||||||||||
Impact of acquisitions/dispositions | — | — | — | — | |||||||||||||||||||||||||
Impact of fuel prices/spread | (0.4) | — | — | — | |||||||||||||||||||||||||
Impact of foreign exchange rates | 0.3 | — | — | — | |||||||||||||||||||||||||
As reported | $ | 106.5 | $ | 120.0 | 15,567 | 19,033 | |||||||||||||||||||||||
TOLLS - TAGS | |||||||||||||||||||||||||||||
Pro forma and macro adjusted | $ | 91.6 | $ | 88.7 | 5.4 | 5.1 | |||||||||||||||||||||||
Impact of acquisitions/dispositions | — | — | — | — | |||||||||||||||||||||||||
Impact of fuel prices/spread | — | — | — | — | |||||||||||||||||||||||||
Impact of foreign exchange rates | (23.9) | — | — | — | |||||||||||||||||||||||||
As reported | $ | 67.6 | $ | 88.7 | 5.4 | 5.1 | |||||||||||||||||||||||
LODGING - ROOM NIGHTS | |||||||||||||||||||||||||||||
Pro forma and macro adjusted | $ | 52.9 | $ | 78.2 | 5.4 | 7.1 | |||||||||||||||||||||||
Impact of acquisitions/dispositions | — | (21.8) | — | (2.7) | |||||||||||||||||||||||||
Impact of fuel prices/spread | — | — | — | — | |||||||||||||||||||||||||
Impact of foreign exchange rates | — | — | — | — | |||||||||||||||||||||||||
As reported | $ | 52.9 | $ | 56.4 | 5.4 | 4.4 | |||||||||||||||||||||||
GIFT - TRANSACTIONS | |||||||||||||||||||||||||||||
Pro forma and macro adjusted | $ | 39.1 | $ | 48.5 | 242.7 | 277.8 | |||||||||||||||||||||||
Impact of acquisitions/dispositions | — | — | — | — | |||||||||||||||||||||||||
Impact of fuel prices/spread | — | — | — | — | |||||||||||||||||||||||||
Impact of foreign exchange rates | — | — | — | — | |||||||||||||||||||||||||
As reported | $ | 39.1 | $ | 48.5 | 242.7 | 277.8 | |||||||||||||||||||||||
OTHER1- TRANSACTIONS | |||||||||||||||||||||||||||||
Pro forma and macro adjusted | $ | 65.6 | $ | 71.9 | 9.9 | 14.6 | |||||||||||||||||||||||
Impact of acquisitions/dispositions | — | — | — | — | |||||||||||||||||||||||||
Impact of fuel prices/spread | — | — | — | — | |||||||||||||||||||||||||
Impact of foreign exchange rates | (1.4) | — | — | — | |||||||||||||||||||||||||
As reported | $ | 64.1 | $ | 71.9 | 9.9 | 14.6 | |||||||||||||||||||||||
FLEETCOR CONSOLIDATED REVENUES, NET | |||||||||||||||||||||||||||||
Pro forma and macro adjusted | $ | 618.0 | $ | 702.9 | Intentionally Left Blank | ||||||||||||||||||||||||
Impact of acquisitions/dispositions | — | (21.8) | |||||||||||||||||||||||||||
Impact of fuel prices/spread | (4.9) | — | |||||||||||||||||||||||||||
Impact of foreign exchange rates | (27.8) | — | |||||||||||||||||||||||||||
As reported | $ | 585.3 | $ | 681.0 | |||||||||||||||||||||||||
* Columns may not calculate due to rounding. | |||||||||||||||||||||||||||||
1Other includes telematics, maintenance, food, transportation and payroll card related businesses. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(Unaudited) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Net income | $ | 188,817 | $ | 225,805 | $ | 494,365 | $ | 659,563 | ||||||||||||||||||
Stock based compensation | 11,905 | 15,273 | 35,069 | 46,120 | ||||||||||||||||||||||
Amortization of intangible assets, premium on receivables, deferred financing costs and discounts | 49,078 | 52,907 | 146,995 | 163,048 | ||||||||||||||||||||||
Investment loss (gain) | 1,330 | — | (30,008) | 15,660 | ||||||||||||||||||||||
Integration and deal related costs1 | 1,768 | — | 11,035 | — | ||||||||||||||||||||||
Restructuring and related costs | 185 | — | 4,912 | — | ||||||||||||||||||||||
Legal settlements/litigation | 2,048 | — | (2,989) | 3,474 | ||||||||||||||||||||||
Write-off of customer receivable2 | — | — | 90,058 | — | ||||||||||||||||||||||
Total pre-tax adjustments | 66,314 | 68,180 | 255,072 | 228,302 | ||||||||||||||||||||||
Income tax impact of pre-tax adjustments at the effective tax rate3 | (13,196) | (15,177) | (55,429) | (49,023) | ||||||||||||||||||||||
Impact of discrete tax item4 | — | 1,782 | 9,848 | (63,098) | ||||||||||||||||||||||
Adjusted net income | $ | 241,935 | $ | 280,590 | $ | 703,856 | $ | 775,744 | ||||||||||||||||||
Adjusted net income per diluted share | $ | 2.80 | $ | 3.10 | $ | 8.09 | $ | 8.62 | ||||||||||||||||||
Diluted shares | 86,273 | 90,522 | 87,006 | 89,976 |
1 Beginning in the first quarter of 2020, the Company included integration and deal related costs in its definition to calculate adjusted net income and adjusted net income per diluted share. Prior period amounts were approximately $1.0 million and $3.8 million for the three and nine months ended September 30, 2019, which we consider immaterial. | ||
2 Represents a bad debt loss in the first quarter of 2020 from a large client in our Cambridge business entering voluntary bankruptcy due to the extraordinary impact of the COVID-19 pandemic. | ||
3 Excludes the results of the Company's investment in the nine months ended September 30, 2019, on our effective tax rate, as results from Masternaut investment are reported within the consolidated Statements of Income on a post-tax basis and no tax-over-book outside basis difference prior to disposition. | ||
4 Represents the impact of a discrete tax reserve adjustment related to prior year tax positions in the nine months ended September 30, 2020 and tax reform in 2019. Also, includes the impact from the disposition of our investment in Masternaut of $64.9 million during the nine months ended September 2019. | ||
*Columns may not calculate due to rounding. |
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 |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of the Publicly Announced Plan | Maximum Value that May Yet be Purchased Under the Publicly Announced Plan (in thousands) | ||||||||||||||||||||||
July 1, 2020 through July 31, 2020 | 412 | $ | 217.19 | 13,436,063 | $ | 293,983 | ||||||||||||||||||||
August 1, 2020 through August 31, 2020 | — | $ | — | 13,436,063 | $ | 293,983 | ||||||||||||||||||||
September 1, 2020 through September 30, 2020 | 999,503 | $ | 238.43 | 14,435,566 | $ | 55,676 | ||||||||||||||||||||
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Exhibit No. | ||||||||
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) | ||||||||
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, filed with the SEC on June 14, 2019) | ||||||||
Amended and Restated Bylaws 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, filed with the SEC on October 28, 2020) | ||||||||
10.1** | Offer letter, dated September 1, 2020, between FLEETCOR Technologies, Inc. and Charles Freund (incorporated by reference to Exhibit 99.1 to the Registrant's Current Report on Form 8-K/A, File No. 001-35004, filed with the SEC on September 4, 2020) | |||||||
31.1* | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended | |||||||
31.2* | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and rule 15d-14(a) of the Securities Exchange Act, as amended | |||||||
32.1* | 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 | |||||||
32.2* | 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 | |||||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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/ Charles R. Freund | Chief Financial Officer (Principal Financial Officer) | |||||||||||||
Charles R. Freund |
/s/ Ronald F. Clarke | ||
Ronald F. Clarke | ||
Chief Executive Officer |
/s/ Charles R. Freund | ||
Charles R. Freund | ||
Chief Financial Officer |
/s/ Ronald F. Clarke | ||
Ronald F. Clarke | ||
Chief Executive Officer |
/s/ Charles R. Freund | ||
Charles R. Freund | ||
Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 83,882 | $ 70,890 |
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) | 125,997,304 | 124,626,786 |
Common stock, shares outstanding (in shares) | 83,396,765 | 85,342,156 |
Treasury stock, shares (in shares) | 42,600,539 | 39,284,630 |
Unaudited Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Income Statement [Abstract] | ||||
Revenues, net | $ 585,283 | $ 681,048 | $ 1,771,522 | $ 1,949,967 |
Expenses: | ||||
Processing | 119,856 | 135,016 | 474,849 | 384,588 |
Selling | 46,762 | 51,790 | 144,995 | 152,907 |
General and administrative | 90,868 | 98,050 | 283,717 | 297,618 |
Depreciation and amortization | 63,479 | 67,347 | 190,117 | 205,700 |
Other operating, net | (214) | (296) | (482) | (1,480) |
Operating income | 264,532 | 329,141 | 678,326 | 910,634 |
Investment loss (gain) | 1,330 | 0 | (30,008) | 15,660 |
Other (income) expense, net | (3,591) | (120) | (10,477) | 628 |
Interest expense, net | 31,383 | 36,504 | 99,474 | 115,088 |
Total other expense | 29,122 | 36,384 | 58,989 | 131,376 |
Income before income taxes | 235,410 | 292,757 | 619,337 | 779,258 |
Provision for income taxes | 46,593 | 66,952 | 124,972 | 119,695 |
Net income | $ 188,817 | $ 225,805 | $ 494,365 | $ 659,563 |
Earnings per share: | ||||
Basic earnings per share (in dollars per share) | $ 2.26 | $ 2.61 | $ 5.87 | $ 7.64 |
Diluted earnings per share (in dollars per share) | $ 2.19 | $ 2.49 | $ 5.68 | $ 7.33 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 83,719 | 86,662 | 84,170 | 86,332 |
Diluted (in shares) | 86,273 | 90,522 | 87,006 | 89,976 |
Unaudited Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 188,817 | $ 225,805 | $ 494,365 | $ 659,563 |
Other comprehensive loss: | ||||
Foreign currency translation losses, net of tax | (10,328) | (180,317) | (577,189) | (148,282) |
Net change in derivative contracts, net of tax | 9,167 | (6,164) | (33,482) | (52,538) |
Total other comprehensive loss | (1,161) | (186,481) | (610,671) | (200,820) |
Total comprehensive income (loss) | $ 187,656 | $ 39,324 | $ (116,306) | $ 458,743 |
Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation Throughout this Current Report on Form 10-Q, the terms “our,” “we,” “us,” and the “Company” refers to FLEETCOR Technologies, Inc. and its subsidiaries. The Company prepared the accompanying unaudited interim consolidated financial statements in accordance with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States (“GAAP”). The unaudited interim 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, 2019. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. These financial statements were prepared using information reasonably available as of September 30, 2020 and through the date of this Report. The accounting estimates used in the preparation of the Company’s consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from these estimates due to the uncertainty around the magnitude and duration of the COVID-19 pandemic, as well as other factors. 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 recorded to accumulated other comprehensive income (loss). Income and expenses are translated at the average monthly rates of exchange in effect during the period. Gains and losses from foreign currency transactions are included in net income. The Company recognized the following foreign exchange gains/losses on long-term intra-entity transactions, net of tax, and foreign exchange gains/losses within the Unaudited Consolidated Statements of Comprehensive Income (Loss) as follows (in millions):
Derivatives The Company uses derivatives to minimize its exposures related to changes in interest rates and to facilitate cross-currency corporate payments by writing derivatives to foreign currency payment customers. The Company is exposed to the risk of changing interest rates because its borrowings are subject to variable interest rates. In order to mitigate this risk, the Company utilizes derivative instruments. Interest rate swap contracts designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company hedges a portion of its variable rate debt utilizing derivatives designated as cash flow hedges. Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in other assets or other noncurrent liabilities and offset against accumulated other comprehensive income/loss, net of tax. Derivative fair value changes that are recorded in accumulated other comprehensive income/loss are reclassified to earnings in the same period or periods that the hedged item affects earnings, to the extent the derivative is effective in offsetting the change in cash flows attributable to the hedged risk. The portions of the change in fair value that are either considered ineffective or are excluded from the measure of effectiveness are recognized immediately within earnings. In the Company's cross-border payments business, the Company 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, as necessary, and economically hedges the net currency risks by entering into offsetting derivatives with established financial institution counterparties. The gain or loss on changes in the fair value of these derivatives are recorded in revenues, net in the Unaudited Consolidated Statements of Income. 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. All cash flows associated with derivatives are included in cash flows from operating activities in the Consolidated Statements of Cash Flows. Refer to Note 13. Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less. Restricted cash represents customer deposits repayable on demand. Financial Instruments-Credit Losses The Company adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", on January 1, 2020, under which the Current Expected Credit Loss methodology for measurement of credit losses on financial assets measured at amortized cost basis, replaces the previous incurred loss impairment methodology. The Company’s financial assets subject to credit losses are primarily trade receivables. The Company utilizes a combination of aging and loss-rate methods to develop an estimate of current expected credit losses, depending on the nature and risk profile of the underlying asset pool, based on product, size of customer and historical losses. Expected credit losses are estimated based upon an assessment of risk characteristics, historical payment experience, and the age of outstanding receivables, adjusted for forward-looking economic conditions. The allowances for remaining financial assets measured at amortized cost basis are evaluated based on underlying financial condition, credit history, and current and forecast economic conditions. The estimation process for expected credit losses includes consideration of qualitative and quantitative risk factors associated with the age of asset balances, expected timing of payment, contract terms and conditions, changes in specific customer risk profiles or mix of customers, geographic risk, economic trends and relevant environmental factors. Revenue The Company provides payment solutions to our business, merchant, consumer and payment network customers. Our payment solutions are primarily focused on specific spend categories, including fuel, lodging, tolls, and general corporate payments, as well as gift card solutions (stored value cards and e-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. Revenues from contracts with customers, within the scope of ASC 606, represent approximately 80% of total consolidated revenues, net, for the three and nine months ended September 30, 2020. The Company accounts for remaining revenues comprised of 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 also writes foreign currency forward and options contracts for its customers to facilitate future payments in foreign currencies, and recognizes revenue in accordance with authoritative fair value and derivatives accounting (ASC 815, "Derivatives"). 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 was as follows:
Revenue by geography (in millions) for the three and nine months ended September 30 was as follows:
Contract Liabilities Deferred revenue contract liabilities for customers subject to ASC 606 were $53.7 million and $71.8 million as of September 30, 2020 and December 31, 2019, respectively. We expect to recognize approximately $33.3 million and $42.6 million of these amounts in revenues within 12 months and the remaining $20.4 million and $29.2 million over the next five years as of September 30, 2020 and December 31, 2019, respectively. Revenue recognized in the nine months ended September 30, 2020 that was included in the deferred revenue contract liability as of December 31, 2019 was approximately $34.0 million. Spot Trade Offsetting The Company uses spot trades to facilitate cross-currency corporate payments in its Cambridge business. Timing in the receipt of cash from customers results in intermediary balances in the receivable from the customers and the payment to the customers' counterparty. In accordance with ASC Subtopic 210-20, "Offsetting," the Company applies offsetting to spot trade assets and liabilities associated with contracts that include master netting agreements, as a right of setoff exists, which the Company believes to be enforceable. As such, the Company has netted the Company's exposure with these customers' counterparties, with the receivables from the customers. The Company recognizes all spot trade assets, net in accounts receivable and all spot trade liabilities, net in accounts payable, each net at the customer level, in its Consolidated Balance Sheets at their fair value. The following table presents the Company’s spot trade assets and liabilities at their fair value at September 30, 2020 and December 31, 2019, (in millions).
Adoption of New Accounting Standards 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 Company adopted this guidance on January 1, 2020, which did not have a material impact on the Company's 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 adopted this guidance on January 1, 2020, which did not have a material impact on the Company's results of operations, financial condition, or cash flows. Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which changes how companies measure and recognize credit impairment for many financial assets. The new expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets (including trade receivables) that are in the scope of the update. The update also made amendments to the current impairment model for held-to-maturity and available-for-sale debt securities and certain guarantees. The Company adopted this guidance on January 1, 2020, which did not have a material impact on the Company's results of operations, financial condition, or cash flows. The Company has made updates to its policies and internal controls over financial reporting as a result of the adoption. In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments", which clarifies certain aspects of accounting for credit losses, hedging activities, and financial instruments. For clarifications around credit losses, the effective date will be the same as the effective date in ASU 2016-13. For entities that have adopted ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", ASU 2019-04 is effective the first annual reporting period beginning after the date of issuance of ASU 2019-04 and may be early adopted. The Company adopted this guidance on January 1, 2020, which did not have a material impact on the Company's results of operations, financial condition, or cash flows. The Company has made updates to its policies and internal controls over financial reporting as a result of the adoption. Pending Adoption of Recently Issued Accounting Standard Income Taxes On December 18, 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which removes certain exceptions to the general principles of ASC 740 and simplifies other areas in order to simplify its application. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption 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. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"), which provides optional expedients and exceptions to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference London Inter-bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022 for which an entity has elected certain optional expedients and are retained through the end of the hedging relationship. The amendments in this update also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. If elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions within the relevant ASC Topic or Industry Subtopic that contains the guidance that otherwise would be required to be applied. The amendments in this update were effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is evaluating the effect of ASU 2020-04 on its consolidated financial statements.
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Accounts and Other Receivables | Accounts and Other Receivables The Company's accounts and other receivables and securitized accounts receivable include the following at September 30, 2020 and December 31, 2019 (in thousands):
The Company maintains a $1.0 billion revolving trade accounts receivable securitization facility (the "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, without recourse, on a revolving basis, up to $1.0 billion of undivided ownership interests in this pool of accounts receivable to banks and 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 banks and 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 securitized 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 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 maturity date for the Company's Securitization Facility is November 14, 2020. On August 21, 2020, the Company signed a commitment letter to enter into an amendment to the Securitization Facility, effective on November 13, 2020, which will, among other things, extend the term to November 12, 2021, unless further extended. The Company recorded a $90.1 million provision for credit losses and write-off related to a customer receivable in our foreign currency trading business during the nine months ended September 30, 2020. The Company's estimated expected credit losses as of September 30, 2020, included estimated adjustments for economic conditions related to COVID-19. A rollforward of the Company’s allowance for credit losses related to accounts receivable for the nine months 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: •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. The following table presents the Company’s financial assets and liabilities which are measured at fair value on a recurring basis at September 30, 2020 and December 31, 2019, (in thousands).
The Company utilizes Level 1 fair value for financial assets designated as trading securities for which there are quoted market prices. During the nine month period ended September 30, 2020, the Company recognized a $30.0 million gain on trading securities sold. Cash flow from trading securities sold was recognized within the Investing section of the Statement of Cash Flows based on the nature of the investment. The Company has highly-liquid investments classified as cash equivalents, with original maturities of 90 days or less, included in our 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 tradable 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 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 the net settlement if the contracts were terminated as of the reporting date. Cash collateral received for foreign exchange derivatives is recorded within customer deposits in our Unaudited Consolidated Balance Sheet at September 30, 2020. Cash collateral deposited for foreign exchange derivatives is recorded within restricted cash in our Unaudited Consolidated Balance Sheet at September 30, 2020. 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 September 30, 2020 and December 31, 2019. The Company’s assets that are measured at fair value on a nonrecurring basis or are evaluated with periodic testing for impairment include property and equipment, goodwill and other intangibles, and investments. 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. For derivatives accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. The Company formally assesses, both at the inception and at least quarterly thereafter, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposures. Any ineffective portion of a financial instrument's change in fair value is immediately recognized into earnings. The Company determines the fair values of its derivatives based on quoted market prices or pricing models using current market rates. The amounts exchanged are calculated by reference to the notional amounts and by other terms of the derivatives, such as interest rates, foreign currency exchange rates, commodity rates or other financial indices. The Company's derivatives are over-the-counter instruments with liquid markets. The Company regularly evaluates the carrying value of its investments. The carrying amount of investments without readily determinable fair values is $7.5 million at September 30, 2020. 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.
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Stockholders' Equity |
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Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity The Company's Board of Directors (the "Board") has approved a stock repurchase program (as updated from time to time, the "Program") authorizing the Company to repurchase its common stock from time to time until February 1, 2023. On October 22, 2020, the Board increased the aggregate size of the Program by $1 billion, to $4.1 billion. Since the beginning of the Program, 14435566 shares have been repurchased for an aggregate purchase price of $3.0 billion, leaving the Company up to approximately $1.06 billion available under the Program for future repurchases in shares of its common stock. 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. On December 18, 2019, the Company entered an accelerated stock repurchase agreement ("2019 ASR Agreement") with a third-party financial institution to repurchase $500 million of its common stock. Pursuant to the 2019 ASR Agreement, the Company delivered $500 million in cash and received 1,431,989 shares based on a stock price of $285.70 on December 18, 2019. The 2019 ASR Agreement was completed on February 20, 2020, at which time the Company received 175,340 additional shares based on a final weighted average per share purchase price during the repurchase period of $311.08. The Company accounted for the 2019 ASR Agreement as two separate transactions: (i) as shares of reacquired common stock for the shares delivered to the Company upon effectiveness of each ASR agreement and (ii) as a forward contract indexed to the Company's common stock for the undelivered shares. The initial delivery of shares was included in treasury stock at cost and results in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share. The forward contracts indexed to the Company's own common stock met the criteria for equity classification, and these amounts were initially recorded in additional paid-in capital.
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Stock-Based Compensation |
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Share-based Payment Arrangement [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. The table below summarizes the expense related to share-based payments recognized in the three and nine months ended September 30, 2020 (in thousands):
The tax benefits recorded on stock based compensation were $52.1 million and $36.8 million for the nine months ended September 30, 2020 and 2019, respectively. The following table summarizes the Company’s total unrecognized compensation cost related to stock-based compensation as of September 30, 2020 (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 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 months ended September 30, 2020 (shares/options and aggregate intrinsic value in thousands):
The aggregate intrinsic value of stock options exercisable at September 30, 2020 was $484.0 million. The weighted average remaining contractual term of options exercisable at September 30, 2020 was 4.6 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 months ended September 30, 2020 and 2019:
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 to four years. The fair value of restricted stock units granted with market based vesting conditions was estimated using the Monte Carlo simulation valuation model with the following assumptions during 2019. There were no restricted stock shares granted with market based vesting conditions during the first nine months of 2020.
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, 2020 (shares in thousands):
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Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions 2020 Acquisitions On August 10, 2020, the Company completed the acquisition of a business in the lodging space in the U.S. The Company financed the acquisition using a combination of available cash and borrowings under its existing credit facility. The results from the acquisition are reported in the North America segment. In connection with this acquisition, the Company signed noncompete agreements with certain parties affiliated with the business with an estimated fair value of $3.8 million. These noncompete agreements were accounted for separately from the business acquisition. The following table summarizes the acquisition accounting (in thousands):
The estimated fair value of intangible assets acquired and the related estimated useful lives consisted of the following (in thousands):
The accounting for these acquisitions is preliminary as the Company is still completing the valuation of goodwill, intangible assets, income taxes and evaluation of acquired contingencies. Other On September 17, 2020, the Company signed a definitive agreement to acquire Associated Foreign Exchange (AFEX), a cross-border payment solutions provider, for approximately $450 million. The transaction is expected to close in 2021, subject to regulatory approval and standard closing conditions. 2019 Acquisitions NvoicePay On April 1, 2019, the Company completed the acquisition of NvoicePay, a provider of full accounts payable automation for businesses. The aggregate purchase price of this acquisition was approximately $208 million, net of cash acquired of $4.1 million. This acquisition further expands the Company's corporate payments product offering. The Company financed the acquisition using a combination of available cash and borrowings under its existing credit facility. The results from NvoicePay are reported in the North America segment. Along with the acquisition of NvoicePay, the Company signed noncompete agreements with certain parties with an estimated fair value of $10.7 million that were accounted for separately from the business acquisition. The following table summarizes the acquisition accounting for NvoicePay (in thousands):
The estimated fair value of intangible assets acquired and the related estimated useful lives consisted of the following (in thousands):
Other During 2019, the Company acquired SOLE Financial, a payroll card provider in the U.S., r2c, a fleet maintenance, compliance and workshop management software provider in the U.K., and Travelliance, an airline lodging provider in the U.S. The aggregate purchase price of these acquisitions was approximately $207 million, net of cash. The Company signed noncompete agreements with certain parties with an estimated fair value of $9.0 million that were accounted for separately from the business acquisitions. The following table summarizes acquisition accounting for the SOLE, r2c, and Travelliance acquisitions (in thousands):
The accounting for the Travelliance acquisition is preliminary and subject to working capital adjustments.
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Goodwill and Other Intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangibles | Goodwill and Other Intangibles A summary of changes in the Company’s goodwill by reportable business segment is as follows (in thousands):
As of September 30, 2020 and December 31, 2019, other intangibles consisted of the following (in thousands):
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Debt |
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Debt | Debt The Company’s debt instruments consist primarily of term loans, revolving lines of credit and a Securitization Facility as follows (in thousands):
______________________ (a)The Company has a Credit Agreement that provides for senior secured credit facilities (collectively, the "Credit Facility") consisting of a revolving credit facility in the amount of $1.285 billion, a term loan A facility in the amount of $3.225 billion and a term loan B facility in the amount of $350 million as of September 30, 2020. 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 with borrowings in U.S. dollars, euros, British pounds, Japanese yen or other currency as agreed in advance, and a sublimit for swing line loans, and (c) a revolving C facility in the amount of $35 million for borrowings in U.S. dollars, Australian dollars or New Zealand dollars. The Credit Agreement also includes an accordion feature for borrowing an additional $750 million in term loan A, term loan B, revolving A or revolving B facility debt and an unlimited amount when the leverage ratio on a pro-forma basis is less than 3.00 to 1.00. Proceeds from the credit facilities may be used for working capital purposes, acquisitions, and other general corporate purposes. On April 24, 2020, the Company entered into the eighth amendment to the Credit Agreement to add a $250 million revolving D facility. On August 20, 2020, the Company terminated the revolving D facility. The maturity date for the term loan A and revolving credit facilities A, B and C is December 19, 2023. The maturity date for the term loan B is August 2, 2024. Interest on amounts outstanding under the Credit Agreement (other than the term loan B) 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 loan B facility accrues based on the Eurocurrency Rate plus 1.75% for Eurocurrency Loans or the Base Rate plus 0.75% for Base Rate Loans. The Eurocurrency rate has a 0% floor. In addition, the Company pays a quarterly commitment fee at a rate per annum ranging from 0.25% to 0.35% of the daily unused portion of the Credit Facility. At September 30, 2020, the interest rate on the term loan A was 1.65%, the interest rate on the term loan B was 1.90%, the interest rate on the revolving A facility was 1.65%, and the interest rate on the revolving B facility was 1.55% for GBP borrowings. The unused credit facility fee was 0.30% at September 30, 2020. (b)The Company is party to a $1.0 billion Securitization Facility. On April 24, 2020, the Company reduced the Securitization Facility commitment from $1.2 billion to $1.0 billion. There is a program fee equal to one month LIBOR plus 0.90% or the Commercial Paper Rate plus 0.80% as of September 30, 2020 and December 31, 2019. The program fee was 0.16% plus 0.88% as of September 30, 2020 and 1.80% plus 0.88% as of December 31, 2019. The unused facility fee is payable at a rate of 0.40% per annum as of September 30, 2020 and December 31, 2019. We have unamortized debt issuance costs of $1.6 million and $0.7 million related to the Securitization Facility as of September 30, 2020 and December 31, 2019, respectively, recorded within other assets in the Unaudited Consolidated Balance Sheet. On August 21, 2020, the Company executed a commitment letter to enter into the seventh amendment to the Securitization Facility effective November 13, 2020. This amendment will extend the Securitization Facility termination date to November 12, 2021, add an uncommitted accordion to increase the purchase limit by up to $500 million, revise obligor concentration limits and reserve calculations, add a 0.375% LIBOR floor and modify certain swing line terms. In addition, the program fee for LIBOR borrowings will increase from 0.90% to 1.25% and the program fee for Commercial Paper Rate borrowings will increase from 0.80% to 1.15%. (c)Other debt includes the long-term portion of deferred payments associated with business acquisitions and deferred revenue. The Company was in compliance with all financial and non-financial covenants at September 30, 2020. The Company has entered into interest rate swap cash flow contracts with U.S. dollar notional amounts in order to reduce the variability of cash flows in the previously unhedged interest payments associated with $2.0 billion of variable rate debt. Refer to Note 13 for further details.
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company's 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 the Company updates the estimate of the annual effective tax rate, and if our estimated tax rate changes, makes a cumulative adjustment. The Company's quarterly tax provision and quarterly estimate of the annual effective tax rate are subject to significant variation due to several factors, including variability in accurately predicting the pre-tax and taxable income and loss and the mix of jurisdictions to which they relate. Additionally, the Company's 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. The provision for income taxes differs from amounts computed by applying the U.S. federal tax rate of 21% for 2020 and 2019 to income before income taxes for the three months ended September 30, 2020 and 2019 due to the following (in thousands):
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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 months ended September 30, 2020, and 2019 is as follows (in thousands, except per share data):
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Segments |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | Segments As previously described in our Annual Report on Form 10-K for the year ended December 31, 2019, the Company historically managed and reported our operating results through two reportable segments, defined by geographic regions: North America and International. In the first quarter of 2020, we evaluated the identification of our operating and reportable segments based upon changes in business models, management reporting, and how the Chief Operating Decision Maker ("CODM") is currently allocating resources, assessing performance and reviewing financial information. We determined that these changes caused the composition of our reportable segments to change and that Brazil represented a third operating and reportable segment, which was previously reported in the International segment. We now manage and report our operating results through three operating and reportable segments defined by geographic regions: North America, Brazil and International, which aligns with how the CODM allocates resources, assesses performance and reviews financial information. This change in reporting segments did not impact our determination of reporting units. The Company’s segment results are as follows for the three and nine month periods ended September 30, 2020 and 2019 (in thousands):
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2020 | |
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. Derivative Lawsuits 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 (“Federal Derivative Action”) seeking recovery on behalf of the Company. The Federal Derivative Action 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. On September 20, 2018, the court entered an order deferring the Federal Derivative Action pending a ruling on motions for summary judgment in the shareholder class action, notice a settlement has been reached in the shareholder class action, or until otherwise agreed to by the parties. After preliminary approval of the proposed settlement of the shareholder class action was granted, the stay on the Federal Derivative Action was lifted. Plaintiffs amended their complaint on February 22, 2020. FLEETCOR filed a motion to dismiss the amended complaint in the Federal Derivative Action on April 17, 2020, which the court granted without leave to amend on October 21, 2020. On January 9, 2019, a similar shareholder derivative complaint was filed in the Superior Court of Gwinnett County, Georgia (“State Derivative Action”), which was stayed pending a ruling on motions for summary judgment in the shareholder class action, notice a settlement has been reached in the shareholder class action, or until otherwise agreed by the parties. On the parties’ joint motion, the court has continued the stay of the State Derivative Action “pending further developments in the first-filed Federal Derivative Action.” The defendants dispute the allegations in the derivative complaints and intend to vigorously defend against the claims. FTC Investigation In October 2017, the Federal Trade Commission (“FTC”) issued a Notice of Civil Investigative Demand to the Company for the production of documentation and a request for responses to written interrogatories. After discussions with the Company, the FTC proposed in October 2019 to resolve potential claims relating the Company’s advertising and marketing practices, principally in its U.S. direct fuel card business within its North American Fuel Card business. The parties reached impasse primarily related to what the Company believes are unreasonable demands for redress made by the FTC. On December 20, 2019, the FTC filed a lawsuit in the Northern District of Georgia against the Company and Ron Clarke. See FTC v. FLEETCOR and Ronald F. Clarke, No. 19-cv-05727 (N.D. Ga.). The complaint alleges the Company and Clarke violated the FTC Act’s prohibitions on unfair and deceptive acts and practices. The complaint seeks among other things injunctive relief, consumer redress, and costs of suit. The Company continues to believe that the FTC’s claims are without merit. The Company has incurred and continues to incur legal and other fees related to this complaint. Any settlement of this matter, or defense against the lawsuit, could involve costs to the Company, including legal fees, redress, penalties, and remediation expenses. At this time, in view of the complexity and ongoing nature of the matter, we are unable to estimate a reasonably possible loss or range of loss that we may incur to settle this matter or defend against the lawsuit brought by the FTC.
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Derivative Financial Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities Foreign Currency Derivatives The Company writes derivatives, primarily foreign currency forward contracts, option contracts, and swaps, with customers and derives a currency spread from this activity. Derivative transactions include: •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. The credit risk inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. Concentrations of credit and performance risk may exist with counterparties, which includes customers and banking partners, as we are engaged in similar activities with similar economic characteristics related to fluctuations in foreign currency rates. 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, if the counterparty does not perform under the term of the contract, the contract may be terminated. 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, 2020 and December 31, 2019 (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 foreign currency derivatives reported in the Unaudited Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 (in millions):
The fair values of derivative assets and liabilities associated with contracts, which include netting terms that the Company believes to be enforceable have been recorded net within the Unaudited Consolidated Balance Sheets. 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 Sheets. The customer has the right to recall their collateral in the event exposures move in their favor, they perform on all outstanding contracts and have no outstanding amounts due to the Company or they cease to do business with the Company. The Company does not offset fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral. Cash Flow Hedges On January 22, 2019, the Company entered into three interest rate swap cash flow contracts (the "swap contracts"). The objective of these swap contracts is to reduce the variability of cash flows in the previously unhedged interest payments associated with $2.0 billion of variable rate debt, the sole source of which is due to changes in the LIBOR benchmark interest rate. As of September 30, 2020, the Company had the following outstanding interest rate derivatives that qualify as hedging instruments and are designated as cash flow hedges of interest rate risk (in millions):
For each of these swap contracts, the Company pays a fixed monthly rate and receives one month LIBOR. The table below presents the fair value of the Company’s interest rate swap contracts, as well as their classification on the Unaudited Consolidated Balance Sheets, as of September 30, 2020 (in millions). See Note 3 for additional information on the fair value of the Company’s swap contracts.
The table below displays the effect of the Company’s derivative financial instruments in the Unaudited Consolidated Statements of Income and other comprehensive loss for the nine months ended September 30, 2020 (in millions):
The estimated net amount of the existing losses expected to be reclassified into earnings within the next 12 months is approximately $49.0 million at September 30, 2020.
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Accumulated Other Comprehensive Loss (AOCI) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss (AOCL) | Accumulated Other Comprehensive Loss (AOCL) The changes in the components of AOCL for the nine months ended September 30, 2020 and 2019 are as follows (in thousands):
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Throughout this Current Report on Form 10-Q, the terms “our,” “we,” “us,” and the “Company” refers to FLEETCOR Technologies, Inc. and its subsidiaries. The Company prepared the accompanying unaudited interim consolidated financial statements in accordance with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States (“GAAP”). The unaudited interim 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, 2019.
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Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. These financial statements were prepared using information reasonably available as of September 30, 2020 and through the date of this Report. The accounting estimates used in the preparation of the Company’s consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from these estimates due to the uncertainty around the magnitude and duration of the COVID-19 pandemic, as well as other factors.
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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 recorded to accumulated other comprehensive income (loss). Income and expenses are translated at the average monthly rates of exchange in effect during the period. Gains and losses from foreign currency transactions are included in net income. |
Derivatives | Derivatives The Company uses derivatives to minimize its exposures related to changes in interest rates and to facilitate cross-currency corporate payments by writing derivatives to foreign currency payment customers. The Company is exposed to the risk of changing interest rates because its borrowings are subject to variable interest rates. In order to mitigate this risk, the Company utilizes derivative instruments. Interest rate swap contracts designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company hedges a portion of its variable rate debt utilizing derivatives designated as cash flow hedges. Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in other assets or other noncurrent liabilities and offset against accumulated other comprehensive income/loss, net of tax. Derivative fair value changes that are recorded in accumulated other comprehensive income/loss are reclassified to earnings in the same period or periods that the hedged item affects earnings, to the extent the derivative is effective in offsetting the change in cash flows attributable to the hedged risk. The portions of the change in fair value that are either considered ineffective or are excluded from the measure of effectiveness are recognized immediately within earnings. In the Company's cross-border payments business, the Company 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, as necessary, and economically hedges the net currency risks by entering into offsetting derivatives with established financial institution counterparties. The gain or loss on changes in the fair value of these derivatives are recorded in revenues, net in the Unaudited Consolidated Statements of Income. 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. All cash flows associated with derivatives are included in cash flows from operating activities in the Consolidated Statements of Cash Flows.
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Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less. Restricted cash represents customer deposits repayable on demand.
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Financial Instruments-Credit Losses | Financial Instruments-Credit Losses The Company adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", on January 1, 2020, under which the Current Expected Credit Loss methodology for measurement of credit losses on financial assets measured at amortized cost basis, replaces the previous incurred loss impairment methodology. The Company’s financial assets subject to credit losses are primarily trade receivables. The Company utilizes a combination of aging and loss-rate methods to develop an estimate of current expected credit losses, depending on the nature and risk profile of the underlying asset pool, based on product, size of customer and historical losses. Expected credit losses are estimated based upon an assessment of risk characteristics, historical payment experience, and the age of outstanding receivables, adjusted for forward-looking economic conditions. The allowances for remaining financial assets measured at amortized cost basis are evaluated based on underlying financial condition, credit history, and current and forecast economic conditions. The estimation process for expected credit losses includes consideration of qualitative and quantitative risk factors associated with the age of asset balances, expected timing of payment, contract terms and conditions, changes in specific customer risk profiles or mix of customers, geographic risk, economic trends and relevant environmental factors.
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Revenue | Revenue The Company provides payment solutions to our business, merchant, consumer and payment network customers. Our payment solutions are primarily focused on specific spend categories, including fuel, lodging, tolls, and general corporate payments, as well as gift card solutions (stored value cards and e-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. Revenues from contracts with customers, within the scope of ASC 606, represent approximately 80% of total consolidated revenues, net, for the three and nine months ended September 30, 2020. The Company accounts for remaining revenues comprised of 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 also writes foreign currency forward and options contracts for its customers to facilitate future payments in foreign currencies, and recognizes revenue in accordance with authoritative fair value and derivatives accounting (ASC 815, "Derivatives").
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Spot Trade Offsetting | Spot Trade OffsettingThe Company uses spot trades to facilitate cross-currency corporate payments in its Cambridge business. Timing in the receipt of cash from customers results in intermediary balances in the receivable from the customers and the payment to the customers' counterparty. In accordance with ASC Subtopic 210-20, "Offsetting," the Company applies offsetting to spot trade assets and liabilities associated with contracts that include master netting agreements, as a right of setoff exists, which the Company believes to be enforceable. As such, the Company has netted the Company's exposure with these customers' counterparties, with the receivables from the customers. The Company recognizes all spot trade assets, net in accounts receivable and all spot trade liabilities, net in accounts payable, each net at the customer level, in its Consolidated Balance Sheets at their fair value. |
Adoption of Accounting Standards | Adoption of New Accounting Standards 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 Company adopted this guidance on January 1, 2020, which did not have a material impact on the Company's 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 adopted this guidance on January 1, 2020, which did not have a material impact on the Company's results of operations, financial condition, or cash flows. Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which changes how companies measure and recognize credit impairment for many financial assets. The new expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets (including trade receivables) that are in the scope of the update. The update also made amendments to the current impairment model for held-to-maturity and available-for-sale debt securities and certain guarantees. The Company adopted this guidance on January 1, 2020, which did not have a material impact on the Company's results of operations, financial condition, or cash flows. The Company has made updates to its policies and internal controls over financial reporting as a result of the adoption. In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments", which clarifies certain aspects of accounting for credit losses, hedging activities, and financial instruments. For clarifications around credit losses, the effective date will be the same as the effective date in ASU 2016-13. For entities that have adopted ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", ASU 2019-04 is effective the first annual reporting period beginning after the date of issuance of ASU 2019-04 and may be early adopted. The Company adopted this guidance on January 1, 2020, which did not have a material impact on the Company's results of operations, financial condition, or cash flows. The Company has made updates to its policies and internal controls over financial reporting as a result of the adoption. Pending Adoption of Recently Issued Accounting Standard Income Taxes On December 18, 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which removes certain exceptions to the general principles of ASC 740 and simplifies other areas in order to simplify its application. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption 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. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"), which provides optional expedients and exceptions to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference London Inter-bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022 for which an entity has elected certain optional expedients and are retained through the end of the hedging relationship. The amendments in this update also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. If elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions within the relevant ASC Topic or Industry Subtopic that contains the guidance that otherwise would be required to be applied. The amendments in this update were effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is evaluating the effect of ASU 2020-04 on its consolidated financial statements.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Foreign Exchange Gains/Losses on Long-Term Intra-Equity Transactions | The Company recognized the following foreign exchange gains/losses on long-term intra-entity transactions, net of tax, and foreign exchange gains/losses within the Unaudited Consolidated Statements of Comprehensive Income (Loss) as follows (in millions):
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Disaggregation of Revenue | Revenue by product (in millions) for the three and nine months ended September 30 was as follows:
Revenue by geography (in millions) for the three and nine months ended September 30 was as follows:
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Schedule of Derivative Assets at Fair Value | The following table presents the Company’s spot trade assets and liabilities at their fair value at September 30, 2020 and December 31, 2019, (in millions).
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Schedule of Derivative Liabilities at Fair Value | The following table presents the Company’s spot trade assets and liabilities at their fair value at September 30, 2020 and December 31, 2019, (in millions).
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Accounts and Other Receivables (Tables) |
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Company's Accounts Receivable and Securitized Accounts Receivable | The Company's accounts and other receivables and securitized accounts receivable include the following at September 30, 2020 and December 31, 2019 (in thousands):
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Allowance for Doubtful Accounts Related to Accounts Receivable | A rollforward of the Company’s allowance for credit losses related to accounts receivable for the nine months ended September 30 is as follows (in thousands):
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets and Liabilities Measured at Fair Value | The following table presents the Company’s financial assets and liabilities which are measured at fair value on a recurring basis at September 30, 2020 and December 31, 2019, (in thousands).
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Expense Related to Share-Based Payments | The table below summarizes the expense related to share-based payments recognized in the three and nine months ended September 30, 2020 (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, 2020 (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 months ended September 30, 2020 (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 months ended September 30, 2020 and 2019:
The fair value of restricted stock units granted with market based vesting conditions was estimated using the Monte Carlo simulation valuation model with the following assumptions during 2019. There were no restricted stock shares granted with market based vesting conditions during the first nine months of 2020.
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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, 2020 (shares in thousands):
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Acquisitions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Acquisition Accounting | The following table summarizes the acquisition accounting (in thousands):
The following table summarizes the acquisition accounting for NvoicePay (in thousands):
The following table summarizes acquisition accounting for the SOLE, r2c, and Travelliance acquisitions (in thousands):
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Summary of Preliminary Estimated Fair Value of Intangible Assets Acquired and the Related Estimated Useful Lives | The estimated 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 Intangibles (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 and December 31, 2019, other intangibles consisted of the following (in thousands):
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Debt (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Debt Instruments | The Company’s debt instruments consist primarily of term loans, revolving lines of credit and a Securitization Facility as follows (in thousands):
______________________ (a)The Company has a Credit Agreement that provides for senior secured credit facilities (collectively, the "Credit Facility") consisting of a revolving credit facility in the amount of $1.285 billion, a term loan A facility in the amount of $3.225 billion and a term loan B facility in the amount of $350 million as of September 30, 2020. 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 with borrowings in U.S. dollars, euros, British pounds, Japanese yen or other currency as agreed in advance, and a sublimit for swing line loans, and (c) a revolving C facility in the amount of $35 million for borrowings in U.S. dollars, Australian dollars or New Zealand dollars. The Credit Agreement also includes an accordion feature for borrowing an additional $750 million in term loan A, term loan B, revolving A or revolving B facility debt and an unlimited amount when the leverage ratio on a pro-forma basis is less than 3.00 to 1.00. Proceeds from the credit facilities may be used for working capital purposes, acquisitions, and other general corporate purposes. On April 24, 2020, the Company entered into the eighth amendment to the Credit Agreement to add a $250 million revolving D facility. On August 20, 2020, the Company terminated the revolving D facility. The maturity date for the term loan A and revolving credit facilities A, B and C is December 19, 2023. The maturity date for the term loan B is August 2, 2024. Interest on amounts outstanding under the Credit Agreement (other than the term loan B) 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 loan B facility accrues based on the Eurocurrency Rate plus 1.75% for Eurocurrency Loans or the Base Rate plus 0.75% for Base Rate Loans. The Eurocurrency rate has a 0% floor. In addition, the Company pays a quarterly commitment fee at a rate per annum ranging from 0.25% to 0.35% of the daily unused portion of the Credit Facility. At September 30, 2020, the interest rate on the term loan A was 1.65%, the interest rate on the term loan B was 1.90%, the interest rate on the revolving A facility was 1.65%, and the interest rate on the revolving B facility was 1.55% for GBP borrowings. The unused credit facility fee was 0.30% at September 30, 2020. (b)The Company is party to a $1.0 billion Securitization Facility. On April 24, 2020, the Company reduced the Securitization Facility commitment from $1.2 billion to $1.0 billion. There is a program fee equal to one month LIBOR plus 0.90% or the Commercial Paper Rate plus 0.80% as of September 30, 2020 and December 31, 2019. The program fee was 0.16% plus 0.88% as of September 30, 2020 and 1.80% plus 0.88% as of December 31, 2019. The unused facility fee is payable at a rate of 0.40% per annum as of September 30, 2020 and December 31, 2019. We have unamortized debt issuance costs of $1.6 million and $0.7 million related to the Securitization Facility as of September 30, 2020 and December 31, 2019, respectively, recorded within other assets in the Unaudited Consolidated Balance Sheet. On August 21, 2020, the Company executed a commitment letter to enter into the seventh amendment to the Securitization Facility effective November 13, 2020. This amendment will extend the Securitization Facility termination date to November 12, 2021, add an uncommitted accordion to increase the purchase limit by up to $500 million, revise obligor concentration limits and reserve calculations, add a 0.375% LIBOR floor and modify certain swing line terms. In addition, the program fee for LIBOR borrowings will increase from 0.90% to 1.25% and the program fee for Commercial Paper Rate borrowings will increase from 0.80% to 1.15%. (c)Other debt includes the long-term portion of deferred payments associated with business acquisitions and deferred revenue.
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Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2020 and 2019 to income before income taxes for the three months ended September 30, 2020 and 2019 due to the following (in thousands):
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Earnings Per Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 months ended September 30, 2020, and 2019 is as follows (in thousands, except per share data):
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Segments (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 and 2019 (in thousands):
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Derivative Financial Instruments and Hedging Activities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 and December 31, 2019 (in millions) is presented in the table below.
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Schedule of Derivative Assets at Fair Value | The following table summarizes the fair value of foreign currency derivatives reported in the Unaudited Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 (in millions):
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Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The table below presents the fair value of the Company’s interest rate swap contracts, as well as their classification on the Unaudited Consolidated Balance Sheets, as of September 30, 2020 (in millions). See Note 3 for additional information on the fair value of the Company’s swap contracts.
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Derivative Instruments, Gain (Loss) | The table below displays the effect of the Company’s derivative financial instruments in the Unaudited Consolidated Statements of Income and other comprehensive loss for the nine months ended September 30, 2020 (in millions):
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Accumulated Other Comprehensive Loss (AOCL) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in the components of AOCL for the nine months ended September 30, 2020 and 2019 are as follows (in thousands):
|
Summary of Significant Accounting Policies - Foreign Currency Translation (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Related Party Transaction [Line Items] | ||||
Foreign exchange gains (losses) | $ 3.7 | $ 0.1 | $ 3.2 | $ 0.3 |
Intra-entity Transactions | ||||
Related Party Transaction [Line Items] | ||||
Foreign exchange gains (losses) | $ 50.4 | $ (48.4) | $ 235.8 | $ (81.7) |
Summary of Significant Accounting Policies - Schedule of Spot Trades (Details) - Spot Trade - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounts Receivable | ||
Assets: | ||
Gross | $ 1,461.7 | $ 1,139.1 |
Offset on the Balance Sheet | (1,421.8) | (1,084.6) |
Net Assets | 39.9 | 54.5 |
Accounts Payable | ||
Liabilities: | ||
Gross Liabilities | 1,455.1 | 1,140.4 |
Offset on the Balance Sheet | (1,421.8) | (1,084.6) |
Net Liabilities | $ 33.3 | $ 55.8 |
Accounts and Other Receivables - Company's Accounts Receivable and Securitized Accounts Receivable (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross receivables | $ 2,324,577 | $ 2,610,824 | ||
Less allowance for credit losses | (83,882) | (70,890) | $ (64,665) | $ (59,963) |
Net accounts and other receivables and securitized accounts receivable | 2,240,695 | 2,539,934 | ||
Gross domestic accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross receivables | 847,080 | 734,410 | ||
Gross domestic securitized accounts receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross receivables | 688,000 | 970,973 | ||
Gross foreign receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross receivables | $ 789,497 | $ 905,441 |
Accounts and Other Receivables - Additional Information (Details) - USD ($) |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Apr. 24, 2020 |
Apr. 23, 2020 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Maximum undivided ownership interest pooled accounts receivable amount sold | $ 1,000,000,000.0 | |||
Provision for credit losses | 152,485,000 | $ 54,735,000 | ||
Gross foreign receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Provision for credit losses | 90,100,000 | |||
Securitization Facility | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Securitized accounts receivable facility | $ 1,000,000,000.0 | $ 1,000,000,000.0 | $ 1,200,000,000 |
Accounts and Other Receivables - Allowance for Doubtful Accounts Related to Accounts Receivable (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit losses beginning of period | $ 70,890 | $ 59,963 |
Provision for credit losses | 152,485 | 54,735 |
Write-offs | (138,939) | (51,273) |
Recoveries | 7,861 | 3,297 |
Impact of foreign currency | (8,415) | (2,057) |
Allowance for credit losses end of period | $ 83,882 | $ 64,665 |
Stock-Based Compensation - Summary of Expense Related to Share-Based Payments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 11,904 | $ 15,273 | $ 35,069 | $ 46,120 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | 5,294 | 7,038 | 18,069 | 26,901 |
Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 6,610 | $ 8,235 | $ 16,999 | $ 19,219 |
Stock-Based Compensation - Summary of Total Unrecognized Compensation Cost Related to Stock-Based Compensation (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 73,055 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 39,576 |
Weighted Average Period of Expense Recognition (in Years) | 1 year 10 months 24 days |
Restricted stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 33,479 |
Weighted Average Period of Expense Recognition (in Years) | 2 years 25 days |
Stock-Based Compensation - Schedule of Weighted-Average Assumptions (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 0.38% | 2.40% |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 30.91% | 26.41% |
Expected life (in years) | 3 years 10 months 24 days | 3 years 8 months 12 days |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.48% | |
Dividend yield | 0.00% | |
Expected volatility | 25.40% | |
Expected life (in years) | 2 years 4 months 9 days |
Stock-Based Compensation - Summary of Changes in Number of Shares of Restricted Stock and Restricted Stock Units (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020
$ / shares
shares
| |
Shares | |
Shares outstanding, beginning of period (in shares) | shares | 243,000 |
Granted (in shares) | shares | 171,000 |
Vested (in shares) | shares | (130,000) |
Canceled or forfeited (in shares) | shares | (97,000) |
Shares outstanding, end of period (in shares) | shares | 187,000 |
Weighted Average Grant Date Fair Value | |
Weighted average grant date fair value, beginning of period (in dollars per share) | $ / shares | $ 246.34 |
Weighted average grant date fair value, granted (in dollars per share) | $ / shares | 259.35 |
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 223.48 |
Weighted average grant date fair value, canceled or forfeited (in dollars per share) | $ / shares | 256.92 |
Weighted average grant date fair value, end of period (in dollars per share) | $ / shares | $ 261.94 |
Acquisitions - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Apr. 01, 2019 |
Dec. 31, 2021 |
Dec. 31, 2019 |
Aug. 10, 2020 |
|
Associated Foreign Exchange | Forecast | ||||
Business Acquisition [Line Items] | ||||
Aggregate purchase price | $ 450.0 | |||
NvoicePay | ||||
Business Acquisition [Line Items] | ||||
Aggregate purchase price | $ 208.0 | |||
Cash acquired from acquisition | 4.1 | |||
r2c, SOLE and Travelliance | ||||
Business Acquisition [Line Items] | ||||
Aggregate purchase price | $ 207.0 | |||
Non-compete agreements | Business in the Lodging Space | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets | $ 3.8 | |||
Non-compete agreements | NvoicePay | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets | $ 10.7 | |||
Non-compete agreements | r2c, SOLE and Travelliance | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets | $ 9.0 |
Goodwill and Other Intangibles - Summary of Changes in Goodwill by Reportable Business Segment (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 4,833,047 |
Acquisitions | 23,593 |
Acquisition Accounting Adjustments | 2,052 |
Foreign Currency | (245,095) |
Goodwill, ending balance | 4,613,597 |
North America | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 3,369,173 |
Acquisitions | 23,593 |
Acquisition Accounting Adjustments | 2,052 |
Foreign Currency | (4,886) |
Goodwill, ending balance | 3,389,932 |
Brazil | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 756,975 |
Acquisitions | 0 |
Acquisition Accounting Adjustments | 0 |
Foreign Currency | (216,402) |
Goodwill, ending balance | 540,573 |
International | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 706,899 |
Acquisitions | 0 |
Acquisition Accounting Adjustments | |
Foreign Currency | (23,807) |
Goodwill, ending balance | $ 683,092 |
Goodwill and Other Intangibles - Additional Information (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Impact of foreign exchange rates on intangible assets | $ 127.3 | |
Amortization expense of intangible assets | $ 138.8 | $ 155.9 |
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, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||||||
Net income | $ 188,817 | $ 158,488 | $ 147,060 | $ 225,805 | $ 261,651 | $ 172,107 | $ 494,365 | $ 659,563 |
Denominator for basic earnings per share (in shares) | 83,719 | 86,662 | 84,170 | 86,332 | ||||
Dilutive securities (in shares) | 2,554 | 3,860 | 2,836 | 3,644 | ||||
Denominator for diluted earnings per share (in shares) | 86,273 | 90,522 | 87,006 | 89,976 | ||||
Basic earnings per share (in dollars per share) | $ 2.26 | $ 2.61 | $ 5.87 | $ 7.64 | ||||
Diluted earnings per share (in dollars per share) | $ 2.19 | $ 2.49 | $ 5.68 | $ 7.33 |
Earnings Per Share - Additional Information (Detail) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 300 | 27 |
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) | 100 | 100 |
Segments - Additional Information (Detail) - segment |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Segment Reporting [Abstract] | ||
Number of reportable segments | 3 | 2 |
Segments - Schedule of Company's Segment Results (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Segment Reporting Information [Line Items] | ||||
Revenues, net | $ 585,283 | $ 681,048 | $ 1,771,522 | $ 1,949,967 |
Operating income | 264,532 | 329,141 | 678,326 | 910,634 |
Depreciation and amortization | 63,479 | 67,347 | 190,117 | 205,700 |
Capital expenditures | 18,149 | 16,706 | 55,019 | 48,681 |
North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues, net | 383,828 | 442,704 | 1,175,950 | 1,257,544 |
Operating income | 153,328 | 205,558 | 372,219 | 562,230 |
Depreciation and amortization | 39,390 | 39,309 | 115,913 | 119,476 |
Capital expenditures | 12,053 | 10,340 | 35,590 | 30,023 |
Brazil | ||||
Segment Reporting Information [Line Items] | ||||
Revenues, net | 79,596 | 106,574 | 253,722 | 315,854 |
Operating income | 35,600 | 42,469 | 104,462 | 126,884 |
Depreciation and amortization | 12,260 | 16,224 | 39,019 | 49,314 |
Capital expenditures | 3,501 | 4,296 | 10,309 | 12,273 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Revenues, net | 121,859 | 131,770 | 341,850 | 376,569 |
Operating income | 75,604 | 81,114 | 201,645 | 221,520 |
Depreciation and amortization | 11,829 | 11,814 | 35,185 | 36,910 |
Capital expenditures | $ 2,595 | $ 2,070 | $ 9,120 | $ 6,385 |
Derivative Financial Instruments and Hedging Activities Schedule of Notional Amounts (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative [Line Items] | ||
Notional amount | $ 16,160.4 | $ 15,841.3 |
Swaps | ||
Derivative [Line Items] | ||
Notional amount | 926.5 | 599.5 |
Futures, forwards and spot | ||
Derivative [Line Items] | ||
Notional amount | 3,537.6 | 3,017.1 |
Written options | ||
Derivative [Line Items] | ||
Notional amount | 6,051.6 | 6,393.9 |
Purchased options | ||
Derivative [Line Items] | ||
Notional amount | $ 5,644.7 | $ 5,830.8 |
Derivative Financial Instruments and Hedging Activities Schedule of Fair Value by Balance Sheet Location (Details) - Not Designated as Hedging Instrument - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative [Line Items] | ||
Derivative Asset, Fair Value, Gross | $ 198.7 | $ 114.9 |
Cash collateral | 19.0 | 6.1 |
Derivative Asset, Fair Value, Gross, Total net of cash collateral | 179.7 | 108.8 |
Derivative Liabilities, Fair Value, Gross | 180.0 | 103.8 |
Cash collateral | 24.2 | 25.6 |
Derivative Liabilities, Fair Value, Gross, Total net of cash collateral | 155.8 | 78.2 |
Derivative Assets, Fair Value, Net | 97.8 | 72.1 |
Derivative Assets, Total net of cash collateral | 78.8 | 66.0 |
Derivative Liabilities, Fair Value, Net | 79.1 | 60.9 |
Derivative Liabilities, Total net of cash collateral | $ 54.9 | $ 35.3 |
Derivative Financial Instruments and Hedging Activities - Narrative (Details) $ in Millions |
Sep. 30, 2020
USD ($)
|
Jan. 22, 2019
USD ($)
derivative
|
---|---|---|
Derivative [Line Items] | ||
Number of cash flow hedges entered into | derivative | 3 | |
Loss to be reclassified during next 12 months | $ 49.0 | |
Variable Rate Debt | ||
Derivative [Line Items] | ||
Long-term debt | $ 2,000.0 | $ 2,000.0 |
Derivative Financial Instruments and Hedging Activities - Schedule of Cash Flow Hedge Notional Amounts (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative [Line Items] | ||
Notional amount | $ 16,160.4 | $ 15,841.3 |
Designated as Hedging Instrument | Interest Rate Swap 1 | ||
Derivative [Line Items] | ||
Notional amount | $ 1,000.0 | |
Fixed Rates | 2.56% | |
Designated as Hedging Instrument | Interest Rate Swap 2 | ||
Derivative [Line Items] | ||
Notional amount | $ 500.0 | |
Fixed Rates | 2.56% | |
Designated as Hedging Instrument | Interest Rate Swap 3 | ||
Derivative [Line Items] | ||
Notional amount | $ 500.0 | |
Fixed Rates | 2.55% |
Derivative Financial Instruments and Hedging Activities - Schedule of Fair Value and Balance Sheet Location (Details) - Interest rate swaps - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative [Line Items] | ||
Derivative liability | $ 100,722 | $ 56,418 |
Other liabilities | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative liability | $ 100,700 |
Derivative Financial Instruments and Hedging Activities - Schedule of Gain (Loss) (Details) - Designated as Hedging Instrument - Interest rate swaps $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Derivative [Line Items] | |
Amount of loss recognized in other comprehensive income (loss) on derivatives, net of tax of $24.6 million | $ 33.5 |
Tax on income (loss) recognized in other comprehensive income on derivatives | 24.6 |
Amount of loss reclassified from accumulated other comprehensive loss into interest expense | $ 26.9 |
Accumulated Other Comprehensive Loss (AOCL) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Stockholders' Equity beginning balance | $ 2,966,434 | $ 2,796,229 | $ 3,711,616 | $ 3,843,372 | $ 3,530,967 | $ 3,340,180 | $ 3,711,616 | $ 3,340,180 |
Other comprehensive loss before reclassifications | (662,222) | (219,985) | ||||||
Amounts reclassified from AOCI | 26,949 | 2,185 | ||||||
Tax effect | 24,602 | 16,980 | ||||||
Total other comprehensive loss | (1,161) | 10,149 | (619,659) | (186,481) | 5,995 | (20,334) | (610,671) | (200,820) |
Stockholders' Equity ending balance | 2,937,750 | 2,966,434 | 2,796,229 | 3,900,310 | 3,843,372 | 3,530,967 | 2,937,750 | 3,900,310 |
Accumulated Other Comprehensive Loss | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Stockholders' Equity beginning balance | (1,581,975) | (1,592,124) | (972,465) | (928,197) | (934,192) | (913,858) | (972,465) | (913,858) |
Total other comprehensive loss | (1,161) | 10,149 | (619,659) | (186,481) | 5,995 | (20,334) | ||
Stockholders' Equity ending balance | (1,583,136) | $ (1,581,975) | (1,592,124) | (1,114,678) | $ (928,197) | (934,192) | (1,583,136) | (1,114,678) |
Cumulative Foreign Currency Translation | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Stockholders' Equity beginning balance | (929,713) | (913,858) | (929,713) | (913,858) | ||||
Other comprehensive loss before reclassifications | (577,189) | (148,282) | ||||||
Amounts reclassified from AOCI | 0 | 0 | ||||||
Tax effect | 0 | 0 | ||||||
Total other comprehensive loss | (577,189) | (148,282) | ||||||
Stockholders' Equity ending balance | (1,506,902) | (1,062,140) | (1,506,902) | (1,062,140) | ||||
Unrealized Gains/Losses on Swap Contracts | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Stockholders' Equity beginning balance | $ (42,752) | $ 0 | (42,752) | 0 | ||||
Other comprehensive loss before reclassifications | (85,033) | (71,703) | ||||||
Amounts reclassified from AOCI | 26,949 | 2,185 | ||||||
Tax effect | 24,602 | 16,980 | ||||||
Total other comprehensive loss | (33,482) | (52,538) | ||||||
Stockholders' Equity ending balance | $ (76,234) | $ (52,538) | $ (76,234) | $ (52,538) |
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