FLEETCOR Reports Second Quarter 2017 Financial Results

Source:
FLEETCOR Technologies, Inc.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170803006431/en/

NORCROSS, Ga.--(BUSINESS WIRE)--Aug. 3, 2017-- FLEETCOR Technologies, Inc. (NYSE:FLT), a leading global provider of commercial payment solutions, today reported financial results for its second quarter ended June 30, 2017.

“We reported another very good quarter, with adjusted net income per diluted share growth of 26%, and organic revenue growth of approximately 9% in the quarter, on a constant fuel price, currency, and spread basis,” said Ron Clarke, chairman and chief executive officer, FLEETCOR Technologies, Inc. “We recently completed the sale of our Nextraq business, we announced the upsizing of our senior credit facility, and accelerated share repurchase (ASR) agreement.”

Financial Results for Second Quarter of 2017:

GAAP Results

  • Total revenues increased 29.5% to $541.2 million in the second quarter of 2017 compared to $417.9 million in the second quarter of 2016.
  • GAAP net income increased 12.7% to $131.0 million in the second quarter of 2017 compared to $116.3 million2 in the second quarter of 2016.
  • GAAP net income per diluted share increased 13.9% to $1.39 in the second quarter of 2017 compared to $1.22 per diluted share2 in the second quarter of 2016.

Non-GAAP Results1

  • Adjusted revenues1 (revenues, net less merchant commissions) increased 29.1% to $510.6 million in the second quarter of 2017 compared to $395.6 million in the second quarter of 2016.
  • Adjusted net income1 increased 24.7% to $187.0 million in the second quarter of 2017 compared to $150.0 million2 in the second quarter of 2016.
  • Adjusted net income per diluted share1 increased 26% to $1.99 in the second quarter of 2017 compared to $1.57 per diluted share2 in the second quarter of 2016.

Fiscal-Year 2017 Outlook:

“We are raising our guidance to reflect our second quarter results compared to our expectations. We also are estimating that the impact of the sale of the Nextraq business, the acquisition of Cambridge, and impact of the ASR will have a neutral impact on our rest of year results, but will be cumulatively accretive on an annual basis.” said Eric Dey, chief financial officer, FLEETCOR Technologies, Inc.

For 2017, FLEETCOR Technologies, Inc. financial guidance is as follows:

  • Total revenues between $2,195 million and $2,245 million;
  • GAAP net income between $545 million and $565 million;
  • GAAP net income per diluted share between $5.80 and $6.00;
  • Adjusted net income1 between $775 million and $795 million; and
  • Adjusted net income per diluted share1 between $8.24 and $8.44.

FLEETCOR’s guidance assumptions for 2017 are as follows:

  • Weighted fuel prices equal to $2.43 per gallon average in the U.S. for those businesses sensitive to the movement in the retail price of fuel for 2017.
  • Market spreads returning to historical levels.
  • Foreign exchange rates as of June 30, 2017. A slight improvement from prior guidance.
  • SVS business is retained for 2017.
  • Interest expense of $108 million in 2017.
  • Fully diluted shares outstanding of 94 million shares. This assumes an approximate 600,000 share impact from the ASR for the balance of the year.
  • Full year tax rate of 29.2%.
  • The Nextraq business was sold on July 17, 2017 and is not included in the Company’s rest of year guidance. The impact of removing Nextraq is an approximate reduction of $0.08 in adjusted net income per diluted share. The Company estimates it will recognize a net gain on sale of Nextraq of approximately $90 million or $0.95 per diluted share, which is not included in guidance.
  • The Company assumes that the Cambridge Global Payments acquisition will close by September 1, and is included in guidance. The impact of the Cambridge acquisition in the Company’s second half guidance is approximately $0.04 to $0.05 in adjusted net income per diluted share, net of deal related expenses.3
  • No impact related to acquisitions or material new partnership agreements not already disclosed.

The Company’s volumes build throughout the year and new asset initiatives gain momentum throughout the year resulting in higher earnings per share in the third and fourth quarters. For the third quarter, the Company is expecting adjusted net income per diluted share to be in the range of $2.09 to $2.16.

_________________________________________
1 Reconciliations of GAAP results to non-GAAP results are provided in Exhibit 1 attached. Additional supplemental data is provided in Exhibit 2-3 and 5-6, and segment information is provided in Exhibit 4. A reconciliation of GAAP guidance to non-GAAP guidance is provided in Exhibit 7.

2 Reflects the impact of the Company’s adoption of Accounting Standard’s Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, to simplify several aspects of the accounting for share-based compensation, including the income tax consequences. See Exhibit 6 for a reconciliation to previously issued results.

3 There can be no assurance that the Cambridge acquisition will close on September 1. The actual 2017 impact will depend on the actual date of closing.
 

Conference Call

The Company will host a conference call to discuss second quarter 2017 financial results today at 5:00pm ET. Hosting the call will be Ron Clarke, chief executive officer, and Eric Dey, chief financial officer. The conference call can be accessed live over the phone by dialing (877) 407-0784, or for international callers (201) 689-8560. A replay will be available one hour after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 13667017. The replay will be available until August 10, 2017. The call will be webcast live from the Company's investor relations website at investor.fleetcor.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about FLEETCOR's beliefs, expectations and future performance, are forward-looking statements. Forward-looking statements can be identified by the use of words such as "anticipate," "intend," "believe," "estimate," "plan," "seek," "project," "expect," "may," "will," "would," "could" or "should," the negative of these terms or other comparable terminology. Examples of forward-looking statements in this press release include statements relating to macro- economic conditions and estimated impact of these conditions on our operations and financial results, expected timing of acquisitions and dispositions, revenue and earnings guidance and assumptions underlying financial guidance. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement, such as fuel price and spread volatility; the impact of foreign exchange rates on operations, revenue and income; the effects of general economic conditions on fueling patterns and the commercial activity of fleets; changes in credit risk of customers and associated losses; the actions of regulators relating to payment cards or resulting from investigations; failure to maintain or renew key business relationships; failure to maintain competitive offerings; failure to maintain or renew sources of financing; failure to complete, or delays in completing, anticipated new customer arrangements or acquisitions and the failure to successfully integrate or otherwise achieve anticipated benefits from such customer arrangements or acquired businesses; failure to successfully expand business internationally, risks related to litigation, our ability to complete an accelerated share repurchase, as well as the other risks and uncertainties identified under the caption "Risk Factors" in FLEETCOR's Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commissionon March 1, 2017. FLEETCOR believes these forward-looking statements are reasonable; however, forward-looking statements are not a guarantee of performance, and undue reliance should not be placed on such statements. The forward-looking statements included in this press release are made only as of the date hereof, and FLEETCOR does not undertake, and specifically disclaims, any obligation to update any such statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments.

About Non-GAAP Financial Measures

Adjusted revenue is calculated as revenues less merchant commissions. Adjusted net income is calculated as net income, adjusted to eliminate (a) non-cash stock based compensation expense related to share based compensation awards, (b) amortization of deferred financing costs, discounts and intangible assets, (c) amortization of the premium recognized on the purchase of receivables, (d) our proportionate share of amortization of intangible assets at our equity method investment, (e) a non-recurring net gain at our equity method investment and (f) impairment of our equity method investment. The Company uses adjusted revenue as a basis to evaluate the Company’s revenues, net of the commissions that are paid to merchants to participate in our card programs. The commissions paid to merchants can vary when market spreads fluctuate in much the same way as revenues are impacted when market spreads fluctuate. The Company believes this is a more effective way to evaluate the Company’s revenue performance. We prepare adjusted net income to eliminate the effect of items that we do not consider indicative of our core operating performance. Adjusted revenues and adjusted net income are supplemental measures of operating performance that do not represent and should not be considered as an alternative to revenues, net income or cash flow from operations, as determined by U.S. generally accepted accounting principles, or U.S. GAAP, and our calculation thereof may not be comparable to that reported by other companies. We believe it is useful to exclude non-cash stock based compensation expense from adjusted net income because non-cash equity grants made at a certain price and point in time do not necessarily reflect how our business is performing at any particular time and stock based compensation expense is not a key measure of our core operating performance. We also believe that amortization expense can vary substantially from company to company and from period to period depending upon their financing and accounting methods, the fair value and average expected life of their acquired intangible assets, their capital structures and the method by which their assets were acquired; therefore, we have excluded amortization expense from our adjusted net income. We also believe one-time non-recurring gains and impairment charges do not necessarily reflect how our equity method investment and business is performing. Reconciliations of GAAP results to non-GAAP results are provided in the attached exhibit 1. A reconciliation of GAAP to non-GAAP product revenue organic growth calculation is provided in the attached exhibit 5. A reconciliation of the impact of the adoption of ASU 2016-09 to GAAP and non-GAAP results is provided in the attached exhibit 6. A reconciliation of GAAP to non-GAAP guidance is provided in the attached exhibit 7.

Management uses adjusted revenues and adjusted net income:

  • as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis;
  • for planning purposes, including the preparation of our internal annual operating budget;
  • to allocate resources to enhance the financial performance of our business; and
  • to evaluate the performance and effectiveness of our operational strategies.

We believe adjusted revenues, adjusted net income, and adjusted net income per diluted share are key measures used by the Company and investors as supplemental measures to evaluate the overall operating performance of companies in our industry. By providing these non-GAAP financial measures, together with reconciliations, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing strategic initiatives.

About FLEETCOR

FLEETCOR Technologies (NYSE: FLT) is a leading global provider of commercial payment solutions. The Company helps businesses of all sizes better control, simplify and secure payment of their fuel, toll, lodging and other general payables. With its proprietary payment acceptance networks, FLEETCORprovides affiliated merchants with incremental sales and loyalty. FLEETCOR serves businesses, partners and merchants in North America, Latin America, Europe, and Australasia. For more information, please visit www.FLEETCOR.com.

 
FleetCor Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income
(In thousands, except per share amounts)
                           
        Three Months Ended June 30,     Six Months Ended June 30,
        2017    

20161

    2017    

20161

                           
Revenues, net       $ 541,237       $ 417,905       $ 1,061,670     $ 832,167  
                           
Expenses:                          
Merchant commissions         30,619         22,308         55,003       50,541  
Processing         103,322         80,691         205,146       160,505  
Selling         38,957         31,947         77,794       58,500  
General and administrative         87,569         63,586         183,003       131,180  
Depreciation and amortization         64,709         48,436         129,575       84,764  
Other operating, net         18         (231 )       38       (446 )
Operating income         216,043         171,168         411,111       347,123  
Equity method investment loss (income)         2,354         (7,184 )       4,731       (4,991 )
Other (income) expense, net         (551 )       104         1,645       763  
Interest expense, net         23,851         15,900         46,978       32,091  
Total other expense         25,654         8,820         53,354       27,863  
Income before income taxes         190,389         162,348         357,757       319,260  
Provision for income taxes         59,402         46,095         103,077       91,917  
Net income       $ 130,987       $ 116,253       $ 254,680     $ 227,343  
                           
Basic earnings per share       $ 1.42       $ 1.25       $ 2.77     $ 2.46  
Diluted earnings per share       $ 1.39       $ 1.22       $ 2.70     $ 2.39  
                           
Weighted average shares outstanding:                          
Basic shares         92,013         92,665         92,060       92,591  
Diluted shares         94,223         95,279         94,392       95,137  
                                         

1

 

Reflects the impact of the Company's adoption of Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, to simplify several aspects of the accounting for share-based compensation, including the income tax consequences. See Exhibit 6 for a reconciliation to previously issued results.

     
 

FleetCor Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets
(In thousands, except share and par value amounts)
 
      June 30, 2017   December 31, 2016
      (Unaudited)    
Assets          
           
Current assets:          
Cash and cash equivalents     $ 564,578     $ 475,018  
Restricted cash       201,039       168,752  

Accounts and other receivables (less allowance for doubtful accounts of $47,836 at
June 30, 2017 and $32,506 at December 31, 2016)

      1,429,563       1,202,009  
Securitized accounts receivable - restricted for securitization investors       741,000       591,000  
Prepaid expenses and other current assets       109,178       90,914  
           
Total current assets       3,045,358       2,527,693  
           
Property and equipment, net       154,278       142,504  
Goodwill       4,212,523       4,195,150  
Other intangibles, net       2,562,326       2,653,233  
Investments       40,845       36,200  
Other assets       86,381       71,952  
           
Total assets     $ 10,101,711     $ 9,626,732  
           
Liabilities and Stockholders’ Equity          
           
Current liabilities:          
Accounts payable     $ 1,240,766     $ 1,151,432  
Accrued expenses       206,073       238,812  
Customer deposits       688,574       530,787  
Securitization facility       741,000       591,000  
Current portion of notes payable and lines of credit       702,444       745,506  
Other current liabilities       40,169       38,781  
           
Total current liabilities       3,619,026       3,296,318  
           
Notes payable and other obligations, less current portion       2,394,621       2,521,727  
Deferred income taxes       637,162       668,580  
Other noncurrent liabilities       45,402       56,069  
           
Total noncurrent liabilities       3,077,185       3,246,376  
           
Commitments and contingencies          
           
Stockholders’ equity:          

Common stock, $0.001 par value; 475,000,000 shares authorized, 121,712,973 shares
issued and 91,878,784 shares outstanding at June 30, 2017; and 121,259,960 shares
issued and 91,836,938 shares outstanding at December 31, 2016

      122       121  
Additional paid-in capital       2,136,913       2,074,094  
Retained earnings       2,473,401       2,218,721  
Accumulated other comprehensive loss       (610,049 )     (666,403 )
Less treasury stock, 29,834,189 shares at June 30, 2017 and 29,423,022 shares at December 31, 2016       (594,887 )     (542,495 )
           
Total stockholders’ equity       3,405,500       3,084,038  
           
Total liabilities and stockholders’ equity     $ 10,101,711     $ 9,626,732  
           
 
FleetCor Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(In thousands)
           
      Six Months Ended June 30,
      2017  

20161

           
Operating activities          
Net income     $ 254,680     $ 227,343  
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation       21,593       16,311  
Stock-based compensation       44,243       32,620  
Provision for losses on accounts receivable       27,648       13,729  
Amortization of deferred financing costs and discounts       3,800       3,651  
Amortization of intangible assets       104,894       66,114  
Amortization of premium on receivables       3,088       2,339  
Deferred income taxes       (32,660 )     (9,248 )
Equity method investment loss (income)       4,731       (4,991 )
Other non-cash operating income       -       (446 )
Changes in operating assets and liabilities (net of acquisitions):          
Restricted cash       (28,739 )     13,555  
Accounts and other receivables       (380,196 )     (392,545 )
Prepaid expenses and other current assets       (18,778 )     (4,636 )
Other assets       (15,050 )     (9,362 )
Accounts payable, accrued expenses and customer deposits       189,750       257,608  
Net cash provided by operating activities       179,004       212,042  
           
           
Investing activities          
Acquisitions, net of cash acquired       (3,580 )     (5,299 )
Purchases of property and equipment       (32,600 )     (24,757 )
Other       (6,327 )     (7,868 )
Net cash used in investing activities       (42,507 )     (37,924 )
           
           
Financing activities          
Proceeds from issuance of common stock       16,432       7,964  
Repurchase of common stock       (52,393 )     (26,037 )
Borrowings on securitization facility, net       150,000       99,000  
Principal payments on notes payable       (66,725 )     (51,750 )
Borrowings from revolver- A Facility       90,000       140,000  
Payments on revolver- A Facility       (215,901 )     (290,000 )
Borrowings on swing line of credit, net       10,245        
Other       537       (666 )
Net cash used in financing activities       (67,805 )     (121,489 )
           
Effect of foreign currency exchange rates on cash       20,868       (6,696 )
           
Net increase in cash and cash equivalents       89,560       45,933  
Cash and cash equivalents, beginning of period       475,018       447,152  
Cash and cash equivalents, end of period     $ 564,578     $ 493,085  
           
Supplemental cash flow information          
Cash paid for interest     $ 68,431     $ 30,361  
           
Cash paid for income taxes     $ 188,157     $ 64,345  
           

1

 

Reflects the impact of the Company's adoption of Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, to simplify several aspects of the accounting for share-based compensation, including the income tax consequences. See Exhibit 6 for a reconciliation to previously issued results.

     
 
Exhibit 1
RECONCILIATION OF NON-GAAP MEASURES
(In thousands, except per share amounts)
(Unaudited)
                   
The following table reconciles revenues, net to adjusted revenues:
                   
      Three Months Ended June 30,   Six Months Ended June 30,
      2017   2016   2017   2016
                   
Revenues, net     $ 541,237     $ 417,905     $ 1,061,670     $ 832,167  
Merchant commissions       30,619       22,308       55,003       50,541  
Total adjusted revenues     $ 510,618     $ 395,597     $ 1,006,667     $ 781,626  
                   
                   
The following table reconciles net income to adjusted net income and adjusted net income per diluted share:*
                   
      Three Months Ended June 30,   Six Months Ended June 30,
      2017  

20161

  2017  

20161

Net income     $ 130,987     $ 116,253     $ 254,680     $ 227,343  
                   
Stock based compensation       21,150       17,434       44,243       32,620  
Amortization of intangible assets       52,240       38,752       104,894       66,114  
Amortization of premium on receivables       1,544       1,349       3,088       2,339  
Amortization of deferred financing costs and discounts       1,886       1,829       3,800       3,651  
Amortization of intangibles at equity method investment       2,917       2,824       5,376       5,127  
Non recurring net gain at equity method investment       -       (10,845 )     -       (10,845 )
                   
Total pre-tax adjustments       79,737       51,343       161,401       99,006  
                   
Income tax impact of pre-tax adjustments at the effective tax rate2       (23,675 )     (17,635 )     (44,055 )     (30,699 )
                   
Adjusted net income     $ 187,049     $ 149,960     $ 372,026     $ 295,650  
Adjusted net income per diluted share     $ 1.99     $ 1.57     $ 3.94     $ 3.11  
                   
Diluted shares       94,223       95,279       94,392       95,137  
                   
* Columns may not calculate due to impact of rounding.
Reflects the impact of the Company's adoption of Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, to simplify several aspects of the accounting for share-based compensation, including the income tax consequences. See Exhibit 6 for a reconciliation to previously issued results.
Excludes the results of our equity method investment on our effective tax rate, as results from our equity method investment are reported within the Consolidated Income Statements on a post-tax basis and no tax-over-book outside basis differences related to our equity method investment reversed during 2016 or are expected to reverse in 2017.
 
Exhibit 2

Transaction Volume and Revenues Per Transaction by Segment and by Product Category, on a GAAP Basis and Pro Forma and Macro Adjusted

(In millions except revenues, net per transaction)
(Unaudited)
The following table presents revenue and revenue per transaction, by segment.*
                                     
        As Reported
        Three Months Ended June 30,   Six Months Ended June 30,
        2017   2016   Change   % Change   2017   2016   Change   % Change
                                     
 

NORTH AMERICA

                                 
  - Transactions       430.7     411.6     19.1     5 %     904.7     846.1     58.6     7 %
  - Revenues, net per transaction     $ 0.80   $ 0.73   $ 0.06     9 %   $ 0.74   $ 0.71   $ 0.03     4 %
  - Revenues, net     $ 343.0   $ 301.1   $ 41.9     14 %   $ 672.9   $ 604.7   $ 68.3     11 %
                                     
 

INTERNATIONAL

                                 
  - Transactions       271.3     53.4     217.9     408 %     542.2     106.0     436.3     412 %
  - Revenues, net per transaction     $ 0.73   $ 2.19   $ (1.46 )   (67 %)   $ 0.72   $ 2.15   $ (1.43 )   (67 %)
  - Revenues, net     $ 198.2   $ 116.8   $ 81.5     70 %   $ 388.7   $ 227.5   $ 161.2     71 %
                                     
                                     
 

FLEETCOR CONSOLIDATED REVENUES

                         
  - Transactions       702.0     465.0     237.0     51 %     1,446.9     952.0     494.9     52 %
  - Revenues, net per transaction     $ 0.77   $ 0.90   $ (0.13 )   (14 %)   $ 0.73   $ 0.87   $ (0.14 )   (16 %)
  - Revenues, net     $ 541.2   $ 417.9   $ 123.3     30 %   $ 1,061.7   $ 832.2   $ 229.5     28 %
                                     
                                     
                                     
The following table presents revenue and revenue per transaction, by product category.*
        As Reported   Pro Forma and Macro Adjusted2
        Three Months Ended June 30,   Three Months Ended June 30,
        2017   2016   Change   % Change   2017   2016   Change   % Change
                                     
 

FUEL CARDS

                                 
  - Transactions       117.3     108.1     9.1     8 %     117.3     111.3     5.9     5 %
  - Revenues, net per transaction     $ 2.37   $ 2.23   $ 0.15     7 %   $ 2.24   $ 2.18   $ 0.06     3 %
  - Revenues, net     $ 278.2   $ 240.7   $ 37.5     16 %   $ 263.0   $ 242.9   $ 20.0     8 %
                                     
 

CORPORATE PAYMENTS

                               
  - Transactions       10.4     9.9     0.5     5 %     10.4     9.9     0.5     5 %
  - Revenues, net per transaction     $ 4.85   $ 4.54   $ 0.31     7 %   $ 4.84   $ 4.54   $ 0.30     7 %
  - Revenues, net     $ 50.2   $ 44.8   $ 5.4     12 %   $ 50.1   $ 44.8   $ 5.3     12 %
                                     
 

TOLLS

                                 
  - Transactions       222.5     9.6     212.9     2211 %     222.5     223.6     (1.0 )   (0 %)
  - Revenues, net per transaction     $ 0.34   $ 0.25   $ 0.09     37 %   $ 0.31   $ 0.27   $ 0.04     14 %
  - Revenues, net     $ 76.0   $ 2.4   $ 73.6     3063 %   $ 69.6   $ 61.3   $ 8.3     13 %
                                     
 

LODGING

                                 
  - Transactions       3.4     3.3     0.1     2 %     3.4     3.3     0.1     2 %
  - Revenues, net per transaction     $ 8.57   $ 7.50   $ 1.06     14 %   $ 8.57   $ 7.50   $ 1.06     14 %
  - Revenues, net     $ 29.0   $ 24.9   $ 4.1     16 %   $ 29.0   $ 24.9   $ 4.1     16 %
                                     
 

GIFT

                                 
  - Transactions       328.3     312.8     15.5     5 %     328.3     312.8     15.5     5 %
  - Revenues, net per transaction     $ 0.13   $ 0.12   $ 0.01     5 %   $ 0.13   $ 0.12   $ 0.01     5 %
  - Revenues, net     $ 41.3   $ 37.4   $ 3.9     11 %   $ 41.3   $ 37.4   $ 3.9     11 %
                                     
 

OTHER1

                                 
  - Transactions       20.1     21.3     (1.1 )   (5 %)     20.1     21.3     (1.1 )   (5 %)
  - Revenues, net per transaction     $ 3.31   $ 3.18   $ 0.12     4 %   $ 3.34   $ 3.18   $ 0.16     5 %
  - Revenues, net     $ 66.6   $ 67.7   $ (1.1 )   (2 %)   $ 67.3   $ 67.7   $ (0.4 )   (1 %)
                                     
                                     
 

FLEETCOR CONSOLIDATED REVENUES

                         
  - Transactions       702.0     465.0     237.0     51 %     702.0     682.2     19.9     3 %
  - Revenues, net per transaction     $ 0.77   $ 0.90   $ (0.13 )   (14 %)   $ 0.74   $ 0.70   $ 0.04     6 %
  - Revenues, net     $ 541.2   $ 417.9   $ 123.3     30 %   $ 520.2   $ 479.1   $ 41.1     9 %
                                                         
* Columns may not calculate due to impact of rounding.
Other includes telematics, maintenance, food, and transportation related businesses.
2 See Exhibit 5 for a reconciliation of pro forma and macro adjusted revenue by product, non-GAAP measures, to the GAAP equivalent.
 
 
Exhibit 3
Revenues by Geography, Product and Source
(In millions)
(Unaudited)
                                       

Revenue by Geography*

    Three Months Ended June 30,     Six Months Ended June 30,
        2017   %   2016   %     2017   %   2016   %
                                       
  US     $ 343   63 %   $ 301   72 %     $ 673   63 %   $ 605   73 %
  UK       58   11 %     61   14 %       112   11 %     119   14 %
 

Brazil

      93   17 %     19   4 %       186   18 %     35   4 %
  Other       47   9 %     38   9 %       90   8 %     73   9 %
                                       
  Consolidated Revenues, net     $ 541   100 %   $ 418   100 %     $ 1,062   100 %   $ 832   100 %
* Columns may not calculate due to impact of rounding.
                                       

Revenue by Product Category*

    Three Months Ended June 30,     Six Months Ended June 30,8
        2017   %   2016   %     2017   %   2016   %
                                       
  Fuel Cards     $ 278   51 %   $ 241   58 %     $ 539   51 %   $ 483   58 %
  Corporate Payments       50   9 %     45   11 %       97   9 %     86   10 %
  Tolls       76   14 %     2   1 %       153   14 %     5   1 %
  Lodging       29   5 %     25   6 %       53   5 %     46   5 %
  Gift       41   8 %     37   9 %       90   8 %     80   10 %
  Other       67   12 %     68   16 %       131   12 %     133   16 %
                                       
  Consolidated Revenues, net     $ 541   100 %   $ 418   100 %     $ 1,062   100 %   $ 832   100 %
* Columns may not calculate due to impact of rounding.
                                       
                                       

Major Sources of Revenue*

    Three Months Ended June 30,     Six Months Ended June 30,8
        2017   %   2016   %     2017   %   2016   %
Customer                                    
  Processing and Program Revenue1     $ 248   46 %   $ 173   42 %     $ 493   46 %   $ 345   41 %
  Late Fees and Finance Charges2       34   6 %     27   6 %       71   7 %     55   7 %
  Miscellaneous Fees3       33   6 %     31   7 %       65   6 %     59   7 %
          314   58 %     231   55 %       629   59 %     459   55 %
Merchant                                    
  Discount Revenue (Fuel)4       74   14 %     66   16 %       146   14 %     126   15 %
  Discount Revenue (NonFuel)5       44   8 %     39   9 %       85   8 %     76   9 %
  Tied to Fuel-Price Spreads6       62   12 %     41   10 %       112   11 %     93   11 %
  Program Revenue7       47   9 %     40   10 %       91   9 %     78   9 %
          227   42 %     187   45 %       433   41 %     373   45 %
                                       
Consolidated Revenues, net     $ 541   100 %   $ 418   100 %     $ 1,062   100 %   $ 832   100 %
                                     
1 Includes revenue from customers based on accounts, cards, devices, transactions, load amounts and/or purchase amounts, etc. for participation in our various fleet and workforce related programs; as well as, revenue from partners (e.g., major retailers, leasing companies, oil companies, petroleum marketers, etc.) for processing and network management services. Primarily represents revenue from North American trucking, lodging, prepaid benefits, telematics, gift cards and toll related businesses.
Fees for late payment and interest charges for carrying a balance charged to a customer.
Non-standard fees charged to customers based on customer behavior or optional participation, primarily including high credit risk surcharges, over credit limit charges, minimum processing fees, printing and mailing fees, environmental fees, etc.
Interchange revenue directly influenced by the absolute price of fuel and other interchange related to fuel products.
5 Interchange revenue related to nonfuel products.
6 Revenue derived from the difference between the price charged to a fleet customer for a transaction and the price paid to the merchant for the same transaction.
7 Revenue derived primarily from the sale of equipment, software and related maintenance to merchants.
8Amounts shown for the six months ended June 30, 2017 and 2016 reflect immaterial corrections in estimated allocation of revenue by product and sources of revenue from previously disclosed amounts for the prior period.
* We may not be able to precisely calculate revenue by source, as certain estimates were made in these allocations. Columns may not calculate due to impact of rounding. This table reflects how management views the sources of revenue and may not be consistent with prior disclosure.
 
 
Exhibit 4
Segment Results
(In thousands)
(Unaudited)
                           
        Three Months Ended June 30,     Six Months Ended June 30,
        2017     2016     2017     2016
Revenues, net:                          
North America       $ 342,995     $ 301,126     $ 672,943     $ 604,674
International         198,242       116,779       388,727       227,493
        $ 541,237     $ 417,905     $ 1,061,670     $ 832,167
                           
Operating income:                          
North America       $ 134,926     $ 117,611     $ 255,898     $ 231,461
International         81,117       53,557       155,213       115,662
        $ 216,043     $ 171,168     $ 411,111     $ 347,123
                           
Depreciation and amortization:                          
North America       $ 33,384     $ 32,180     $ 66,561     $ 63,612
International         31,325       16,256       63,014       21,152
        $ 64,709     $ 48,436     $ 129,575     $ 84,764
                           
Capital expenditures:                          
North America       $ 12,102     $ 8,579     $ 21,734     $ 16,521
International         5,702       4,439       10,866       8,236
        $ 17,804     $ 13,018     $ 32,600     $ 24,757
                           
 
Exhibit 5
Reconciliation of Non-GAAP Revenue and Transactions by Product to GAAP*
(In millions)
(Unaudited)
                     
        Revenue   Transactions
        Three Months Ended June 30,   Three Months Ended June 30,
        2017   2016   2017   2016
                     
 

FUEL CARDS

                 
  Pro forma and macro adjusted2,3     $ 263.0     $ 242.9     117.3   111.3  
  Impact of acquisitions/dispositions       -       (2.3 )   -   (3.2 )
  Impact of fuel prices/spread       19.5       -     -   -  
  Impact of foreign exchange rates       (4.3 )     -     -   -  
  As reported     $ 278.2     $ 240.7     117.3   108.1  
                     
 

CORPORATE PAYMENTS

                 
  Pro forma and macro adjusted2,3     $ 50.1     $ 44.8     10.4   9.9  
  Impact of acquisitions/dispositions       -       -     -   -  
  Impact of fuel prices/spread       0.1       -     -   -  
  Impact of foreign exchange rates       -       -     -   -  
  As reported     $ 50.2     $ 44.8     10.4   9.9  
                     
 

TOLLS

                 
  Pro forma and macro adjusted2,3     $ 69.6     $ 61.3     222.5   223.6  
  Impact of acquisitions/dispositions       -       (58.9 )   -   (213.9 )
  Impact of fuel prices/spread       -       -     -   -  
  Impact of foreign exchange rates       6.4       -     -   -  
  As reported     $ 76.0     $ 2.4     222.5   9.6  
                     
 

LODGING

                 
  Pro forma and macro adjusted2,3     $ 29.0     $ 24.9     3.4   3.3  
  Impact of acquisitions/dispositions       -       -     -   -  
  Impact of fuel prices/spread       -       -     -   -  
  Impact of foreign exchange rates       -       -     -   -  
  As reported     $ 29.0     $ 24.9     3.4   3.3  
                     
 

GIFT

                 
  Pro forma and macro adjusted2,3     $ 41.3     $ 37.4     328.3   312.8  
  Impact of acquisitions/dispositions       -       -     -   -  
  Impact of fuel prices/spread       -       -     -   -  
  Impact of foreign exchange rates       -       -     -   -  
  As reported     $ 41.3     $ 37.4     328.3   312.8  
                     
 

OTHER1

                 
  Pro forma and macro adjusted2,3     $ 67.3     $ 67.7     20.1   21.3  
  Impact of acquisitions/dispositions       -       -     -   -  
  Impact of fuel prices/spread       -       -     -   -  
  Impact of foreign exchange rates       (0.7 )     -     -   -  
  As reported     $ 66.6     $ 67.7     20.1   21.3  
                     
                     
 

FLEETCOR CONSOLIDATED REVENUES

                 
  Pro forma and macro adjusted2,3     $ 520.2     $ 479.1     702.0   682.2  
  Impact of acquisitions/dispositions       -       (61.2 )   -   (217.1 )
  Impact of fuel prices/spread       19.7       -     -   -  
  Impact of foreign exchange rates       1.4       -     -   -  
  As reported     $ 541.2     $ 417.9     702.0   465.0  
                     
* Columns may not calculate due to impact of rounding.
Other includes telematics, maintenance, food, and transportation related businesses.
2016 is pro forma to include acquisitions and exclude dispositions, consistent with 2017 ownership.

2017 is adjusted to remove the impact of changes in the macroeconomic environment to be consistent with the same period of prior year, using constant fuel prices, fuel price spreads and foreign exchange rates.

 
 
Exhibit 6
Reconciliation of the Impact of the Company's Adoption of Accounting Standards Update 2016-09
(In thousands, except per share amounts)
(Unaudited)
                         

The following table reconciles the impact of retrospectively applying ASU 2016-09 to the previously issued consolidated statements of
income for the three and six month periods ended June 30, 2016:*

                         
    Three Months Ended June 30, 2016   Six Months Ended June 30, 2016
   

As Previously
Reported

  Adjustments   As Recast1  

As Previously
Reported

  Adjustments   As Recast1
Income before income taxes   $ 162,348     $ -     $ 162,348     $ 319,260     $ -     $ 319,260  
Provision for income taxes     48,163       (2,068 )     46,095       95,103       (3,186 )     91,917  
Net income   $ 114,185     $ 2,068     $ 116,253     $ 224,157     $ 3,186     $ 227,343  
Earnings per share:                        

Basic earnings per share

  $ 1.23     $ 0.02     $ 1.25     $ 2.42     $ 0.04     $ 2.46  
Diluted earnings per share   $ 1.21     $ 0.01     $ 1.22     $ 2.37     $ 0.02     $ 2.39  
                         
Weighted average common shares outstanding:                        
Basic     92,665       -       92,665       92,591       -       92,591  
Diluted     94,549       729       95,279       94,437       700       95,137  
                         

The following table reconciles the impact of retrospectively applying ASU 2016-09 to the previously disclosed calculation of adjusted net income and
adjusted net income per diluted share for the three and six month periods ended June 30, 2016:*

                         
    Three Months Ended June 30, 2016   Six Months Ended June 30, 2016
   

As Previously
Reported

  Adjustments   As Recast1  

As Previously
Reported

  Adjustments   As Recast1
Adjusted net income and adjusted net income per diluted share:                        
Net Income   $ 114,185     $ 2,068     $ 116,253     $ 224,157     $ 3,186     $ 227,343  
                         
Total pre-tax adjustments     51,343       -       51,343       99,006       -       99,006  
                         
Income tax impact of pre-tax adjustments at the effective tax rate2     (18,427 )     791       (17,635 )     (31,809 )     1,110       (30,699 )
                         
Adjusted net income   $ 147,101     $ 2,859     $ 149,960     $ 291,354     $ 4,296     $ 295,650  
Adjusted net income per diluted share   $ 1.56     $ 0.01     $ 1.57     $ 3.09     $ 0.02     $ 3.11  
                         
Diluted shares     94,549       729       95,279       94,437       700       95,137  
                         

The following table reconciles the impact of retrospectively applying ASU 2016-09 to the consolidated statement of cash flows for the six months ended June 30, 2016:*

                         
    Six Months Ended June 30, 2016            
   

As Previously
Reported

  Adjustments   As Recast1            
                         
Net cash provided by operating activities   $ 208,856     $ 3,186     $ 212,042              
Net cash used in investing activities     (37,924 )     -       (37,924 )            
Net cash used in financing activities     (118,303 )     (3,186 )     (121,489 )            
Effect of foreign currency exchange rates on cash     (6,696 )     -       (6,696 )            
                         

Net increase in cash

  $ 45,933     $ -     $ 45,933              
                         
* Columns may not calculate due to impact of rounding.
Reflects the impact of the Company's adoption of Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, to simplify several aspects of the accounting for share-based compensation, including the income tax consequences.
Excludes the results of our equity method investment on our effective tax rate, as results from our equity method investment are reported within the Consolidated Income Statements on a post-tax basis and no tax-over-book outside basis differences related to our equity method investment reversed during 2016 or are expected to reverse in 2017.
 
 
Exhibit 7
RECONCILIATION OF NON-GAAP GUIDANCE MEASURES
(In millions, except per share amounts)
(Unaudited)
         
The following table reconciles 2017 financial guidance for net income to adjusted net income and adjusted net income per diluted share, at both ends of the range:
    2017 GUIDANCE
    Low*   High*
Net income   $ 545     $ 565  
Net income per diluted share   $ 5.80     $ 6.00  
         
Stock based compensation     84       84  
Amortization of intangible assets, premium on receivables, deferred financing costs and discounts     229       229  
Amortization of intangibles at equity method investment     11       11  
         
Total pre-tax adjustments     324       324  
         
Income tax impact of pre-tax adjustments at the effective tax rate**     (95 )     (95 )
         
Adjusted net income   $ 775     $ 795  
Adjusted net income per diluted share   $ 8.24     $ 8.44  
         
Diluted shares     94       94  
* Columns may not calculate due to impact of rounding.

** Excludes the results of our equity method investment on our effective tax rate, as results from our equity method investment are reported
within the Consolidated Income Statements on a post-tax basis and no tax-over-book outside basis differences related to our equity method investment are expected to reverse during 2017.

FLEETCOR Technologies, Inc.

Investor Relations
Media Relations