XML 18 R8.htm IDEA: XBRL DOCUMENT v3.23.2
Summary of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Basis of Presentation
Throughout this Quarterly 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 accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, 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, 2022.
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 to us as of June 30, 2023 and through the date of this Quarterly Report. The accounting estimates used in the preparation of the Company’s interim 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 ongoing conflict between Russia and Ukraine, the impact of changes to monetary policy, 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 loss. Income and expenses are translated at the average monthly rates of exchange in effect during the year. Gains and losses from foreign currency transactions of these subsidiaries are included in net income. The Company recognized foreign exchange gains and losses, which are recorded within other expense, net in the Unaudited Consolidated Statements of Income, for the three and six months ended June 30, 2023 and 2022 as follows (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Foreign exchange gains (losses)$0.9 $(1.8)$0.2 $(2.2)
The Company recorded foreign currency gains on long-term intra-entity transactions included as a component of foreign currency translation gains, net of tax, in the Unaudited Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022 as follows (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Foreign currency gains on long-term intra-entity transactions$7.4 $10.3 $12.3 $156.3 
Cash, Cash Equivalents, and Restricted Cash
Cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less. Restricted cash primarily represents a) customer deposits repayable on demand, b) collateral received from customers for cross-currency transactions in our cross-border payments business, which are restricted from use other than to repay customer deposits and secure and settle cross-currency transactions, and c) collateral posted with banks for hedging positions in our cross-border payments business. Based on our assessment of the current capital market conditions and related impact on our access to cash, we have reclassified all cash held at our Russian businesses of $216.5 million to restricted cash as of June 30, 2023.
Revenue
The Company provides payment solutions to our business, merchant, consumer and payment network customers. Our payment solutions are primarily focused on specific commercial spend categories, including Fleet, Corporate Payments, Lodging, Brazil and Other (stored value cards and e-cards). The Company provides solutions 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, "Revenue Recognition", represent approximately 86% and 87% of total consolidated revenues, net, for the three and six months ended June 30, 2023, respectively. The Company accounts for revenue from late fees and finance charges, in jurisdictions where permitted under local regulations, primarily in the U.S. and Canada in accordance with ASC 310, "Receivables". Such fees are recognized net of a provision for estimated uncollectible amounts, at the time the fees and finance charges are assessed and services are provided and represent approximately 6% of total consolidated revenues, net for the three and six months ended June 30, 2023. In addition, in its cross-border payments business, the Company writes foreign currency forward and option derivative contracts for its customers to facilitate future payments in foreign currencies. These contracts are accounted for in accordance with ASC 815, "Derivatives and Hedging." Net revenues from realized and unrealized gains and losses related to these derivative contracts represent approximately 8% and 7% of total consolidated revenues for the three and six months ended June 30, 2023, respectively. Our revenue is generally reported net of the cost for underlying products and services purchased through our payment solutions. In this report, we refer to this net revenue as "revenue".
Disaggregation of Revenues
The Company provides its services to customers across different payment solutions and geographies. The Company's solutions have been merged to align with its segments. Revenue by solution (in millions) for the three and six months ended June 30, was as follows:
Revenues, net by Solution*Three Months Ended June 30,Six Months Ended June 30,
2023%2022%2023%2022%
Fleet$382.6 40 %$377.4 44 %$755.3 41 %$729.0 44 %
Corporate Payments247.0 26 %189.7 22 %474.2 26 %373.5 23 %
Lodging136.6 14 %116.9 14 %258.9 14 %211.5 13 %
Brazil126.1 13 %111.8 13 %247.8 13 %214.4 13 %
Other56.0 6 %65.5 8 %113.3 6 %122.3 7 %
Consolidated revenues, net$948.2 100 %$861.3 100 %$1,849.5 100 %$1,650.5 100 %
*Columns may not calculate due to rounding.
Revenue by geography (in millions) for the three and six months ended June 30, was as follows:
Revenues, net by Geography*Three Months Ended June 30,Six Months Ended June 30,
2023%2022%2023%2022%
United States$534.7 56 %$527.7 61 %$1,048.4 57 %$999.5 61 %
Brazil126.1 13 %111.8 13 %247.8 13 %214.4 13 %
United Kingdom111.2 12 %93.4 11 %218.9 12 %188.0 11 %
Other176.2 19 %128.4 15 %334.4 18 %248.7 15 %
Consolidated revenues, net$948.2 100 %$861.3 100 %$1,849.5 100 %$1,650.5 100 %
*Columns may not calculate due to rounding.
Contract Liabilities
Deferred revenue contract liabilities for customers subject to ASC 606 were $50.8 million and $57.7 million as of June 30, 2023 and December 31, 2022, respectively. We expect to recognize approximately $33.6 million of these amounts in revenues within 12 months and the remaining $17.2 million over the next five years as of June 30, 2023. Revenue recognized in the six months ended June 30, 2023 that was included in the deferred revenue contract liability as of December 31, 2022 was approximately $25.8 million.
Spot Trade Offsetting
The Company uses spot trades to facilitate cross-currency corporate payments in its cross-border payments business. The Company applies offsetting to our 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 spot trade liabilities against spot trade receivables at the counter-party level. 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 June 30, 2023 and December 31, 2022 (in millions):
June 30, 2023December 31, 2022
Gross Offset on the Balance SheetNet GrossOffset on the Balance SheetNet
Assets
Accounts Receivable$3,200.8 $(3,022.6)$178.2 $2,409.8 $(2,266.0)$143.8 
Liabilities
Accounts Payable$3,093.4 $(3,022.6)$70.8 $2,332.5 $(2,266.0)$66.5 
Reclassifications and Adjustments
Certain disclosures for prior periods have been reclassified to conform with current year presentation, including the breakout of derivatives assets and liabilities, net within the Consolidated Statements of Cash Flows, and the presentation of disaggregated revenues by solution to align with our revenues by segment presentation.