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August 4, 2016 4:19 PM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
________________________________________________________ 
FORM 8-K
 
________________________________________________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 4, 2016
 
________________________________________________________ 
FleetCor Technologies, Inc.
________________________________________________________ 
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
 
Delaware
 
001-35004
 
72-1074903
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 
 
 
5445 Triangle Parkway, Suite 400,
Norcross, Georgia
 
 
 
30092
(Address of principal executive offices)
 
 
 
(Zip Code)
Registrant’s telephone number, including area code: (770) 449-0479
Not Applicable

Former name or former address, if changed since last report
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02 Results of Operations and Financial Condition.
On August 4, 2016, FleetCor Technologies, Inc. issued a press release announcing its financial results for the three months and six months ended June 30, 2016. A copy of the press release is attached as Exhibit 99.1, which is incorporated by reference in its entirety. The information in this item, including Exhibit 99.1, is being furnished, not filed. Accordingly, the information in this item will not be incorporated by reference into any registration statement filed by FleetCor Technologies, Inc. under the Securities Act of 1933, as amended, unless specifically identified as being incorporated into it by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. 99.1 FleetCor Technologies, Inc. press release dated August 4, 2016.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
FleetCor Technologies, Inc.
 
 
 
August 4, 2016
 
 
 
By:   /s/ Eric R. Dey
 
 
 
 
 
 
Eric R. Dey
 
 
 
 
 
 
Chief Financial Officer






Exhibit Index
 
 
 
 
Exhibit No.
  
Description
 
 
99.1
  
FleetCor Technologies, Inc. press release dated August 4, 2016.




Exhibit 99.1
FleetCor Reports Second Quarter 2016 Financial Results

Raises 2016 Guidance


NORCROSS, Ga., August 4, 2016 — FleetCor Technologies, Inc. (NYSE: FLT), a leading global provider of fuel cards and workforce payment products to businesses, today reported financial results for its second quarter ended June 30, 2016.

“We reported another solid quarter, despite the continuation of the unfavorable macro-environment. Importantly, our fundamentals continued to be strong and organic revenue growth was 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 are also pleased to announce the signing of our new Speedway partnership agreement and have received unconditional regulatory approval from CADE for the STP acquisition, which we expect to close in the third quarter.”

Financial Results for Second Quarter 2016:

GAAP Results
•
Total revenues increased 3% to $417.9 million in the second quarter of 2016 compared to $404.6 million in the second quarter of 2015.
•
GAAP net income increased 16% to $114.2 million in the second quarter of 2016 compared to $98.7 million in the second quarter of 2015.
•
GAAP net income per diluted share increased 15% to $1.21 in the second quarter of 2016 compared to $1.05 per diluted share in the second quarter of 2015.

Non-GAAP Results1 
•
Adjusted revenues1 (revenues, net less merchant commissions) increased 3% to $395.6 million in the second quarter of 2016 compared to $382.9 million in the second quarter of 2015.
•
Adjusted net income1 increased 6% to $147.1 million in the second quarter of 2016 compared to $138.9 million in the second quarter of 2015.
•
Adjusted net income per diluted share1 increased 5% to $1.56 in the second quarter of 2016 compared to $1.48 in the second quarter of 2015.

“We believe macro-economic headwinds impacted our business in the second quarter by approximately $25 million in revenue or approximately $0.15 in adjusted net income per diluted share on a year over year basis,” said Eric Dey, chief financial officer FleetCor Technologies, Inc. “We are raising our guidance to reflect our second quarter results compared to our internal expectations, an improved macro-economic outlook for fuel prices, and the expected early adoption of the new accounting rules for stock based compensation in the third quarter.”

Fiscal Year 2016 Outlook:

For fiscal-year 2016, FleetCor Technologies, Inc. financial guidance and assumptions are as follows:
•

•
Total revenues between $1,740 million and $1,780 million;
•
GAAP net income1 between $475 million and $486 million;
•
GAAP net income per diluted share1 between $5.02 and $5.12;
•
Adjusted net income1 between $627 million and $640 million; and
•
Adjusted net income per diluted share1 between $6.61 and $6.75.


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





FleetCor’s fiscal-year guidance assumptions for 2016 are as follows:

•
Weighted average fuel price of $2.31 for the second half of the year equal to the second quarter of 2016.
•
Market spreads returning to normalized levels for the second half of 2016, down approximately $10 million versus 2015.
•
Foreign exchange rates equal to the seven day average ended July 13, 2016.
•
SVS business is retained for 2016.
•
Expected early adoption of the new accounting rules for stock options in the third quarter. The impact is projected to lower our effective tax rate for the balance of the year and will impact GAAP and adjusted net income per diluted share positively by approximately $0.05-$0.07 per share. The favorable impact assumes a normal level of stock option exercises over the balance of the year.
•
Continued weakness in the Company’s Brazilian and Russian businesses.
•
Fully diluted shares outstanding of approximately 95.0 million shares.
•
Full year tax rate of approximately 30.0%.
•
The Travelcard acquisition in the Netherlands, although strategic in nature, will be immaterial to both revenue and profit in the second half of the year.
•
No impact related to the STP acquisition and the new Speedway partnership agreement.

Conference Call
The company will host a conference call to discuss second quarter 2016 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 (855) 327-6837, or for international callers (631) 891-4304. A replay will be available one hour after the call and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 10001428. The replay will be available until August 11, 2016. 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, 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 partnership arrangements or acquisitions and the failure to successfully integrate or otherwise achieve anticipated benefits from such partnerships or acquired businesses; failure to successfully expand business internationally, 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, 2015, filed with the Securities and Exchange Commission on February 29, 2016. 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, net 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 and





(e) a non-recurring net gain at our equity method investment. The company uses adjusted revenue’s 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, 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 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 guidance is provided in the attached exhibit 4.
 
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 is a leading global provider of fuel cards and workforce payment products to businesses. FleetCor's payment programs enable businesses to better control employee spending and provide card-accepting merchants with a high volume customer base that can increase their sales and customer loyalty. FleetCor serves commercial accounts in North America, Latin America, Europe, and Australia/New Zealand. For more information, please visit www.FLEETCOR.com.

Contact:
Investor Relations
(770) 729-2017







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,
 
 
2016
 
2015
 
2016
 
2015
Revenues, net
 
$
417,905

 
$
404,605

 
$
832,167

 
$
820,771

Expenses:
 
 
 

 
 
 
 
Merchant commissions
 
22,308

 
21,725

 
50,541

 
49,051

Processing
 
80,691

 
74,564

 
160,505

 
155,920

Selling
 
31,947

 
27,297

 
58,500

 
53,628

General and administrative
 
63,586

 
63,388

 
131,180

 
133,110

Depreciation and amortization
 
48,436

 
48,827

 
84,764

 
96,909

Other operating, net
 
(231
)
 
(347
)
 
(446
)
 
(772
)
Operating income
 
171,168

 
169,151

 
347,123

 
332,925

Equity method investment (income) loss
 
(7,184
)
 
5,118

 
(4,991
)
 
7,818

Other expense, net
 
104

 
653

 
763

 
2,513

Interest expense, net
 
15,900

 
18,089

 
32,091

 
37,655

Total other expense
 
8,820

 
23,860

 
27,863

 
47,986

Income before income taxes
 
162,348

 
145,291

 
319,260

 
284,939

Provision for income taxes
 
48,163

 
46,613

 
95,103

 
92,108

Net income
 
$
114,185

 
$
98,678

 
$
224,157

 
$
192,831

Basic earnings per share
 
$
1.23

 
$
1.07

 
$
2.42

 
$
2.10

Diluted earnings per share
 
$
1.21

 
$
1.05

 
$
2.37

 
$
2.05

Weighted average shares outstanding:
 
 
 

 

 

Basic shares
 
92,665

 
91,904

 
92,591

 
91,828

Diluted shares
 
94,549

 
94,050

 
94,437

 
93,992

 





FleetCor Technologies, Inc. and subsidiaries
Consolidated Balance Sheets
(In thousands, except share and par value amounts)
 
 
 
June 30, 2016
 
December 31, 2015
 
 
(Unaudited)
 
 
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
493,085

 
$
447,152

Restricted cash
 
156,014

 
167,492

Accounts receivable (less allowance for doubtful accounts of $25,236 and $21,903, at June 30, 2016 and December 31, 2015, respectively)
 
901,291

 
638,954

Securitized accounts receivable — restricted for securitization investors
 
713,000

 
614,000

Prepaid expenses and other current assets
 
73,355

 
68,113

Deferred income taxes
 
7,106

 
8,913

Total current assets
 
2,343,851

 
1,944,624

Property and equipment
 
189,665

 
163,569

Less accumulated depreciation and amortization
 
(99,242
)
 
(82,809
)
Net property and equipment
 
90,423

 
80,760

Goodwill
 
3,557,446

 
3,546,034

Other intangibles, net
 
2,112,238

 
2,183,595

Equity method investment
 
90,803

 
76,568

Other assets
 
66,853

 
58,225

Total assets
 
$
8,261,614

 
$
7,889,806

Liabilities and Stockholders’ Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
897,057

 
$
669,528

Accrued expenses
 
160,566

 
150,677

Customer deposits
 
503,112

 
507,233

Securitization facility
 
713,000

 
614,000

Current portion of notes payable and lines of credit
 
111,158

 
261,100

Other current liabilities
 
40,303

 
44,936

Total current liabilities
 
2,425,196

 
2,247,474

Notes payable and other obligations, less current portion
 
2,007,918

 
2,059,900

Deferred income taxes
 
705,130

 
713,428

Other noncurrent liabilities
 
40,665

 
38,957

Total noncurrent liabilities
 
2,753,713

 
2,812,285

Commitments and contingencies
 
 
 
 
Stockholders’ equity:
 
 
 
 
Common stock, $0.001 par value; 475,000,000 shares authorized, 120,911,444 shares issued and 92,556,276 shares outstanding at June 30, 2016; and 475,000,000 shares authorized, 120,539,041 shares issued and 92,376,335 shares outstanding at December 31, 2015
 
121

 
121

Additional paid-in capital
 
2,032,687

 
1,988,917

Retained earnings
 
1,990,492

 
1,766,336

Accumulated other comprehensive loss
 
(559,741
)
 
(570,811
)
Less treasury stock, 28,355,168 and 28,162,706 shares at June 30, 2016 and December 31, 2015, respectively
 
(380,854
)
 
(354,516
)
Total stockholders’ equity
 
3,082,705

 
2,830,047

Total liabilities and stockholders’ equity
 
$
8,261,614

 
$
7,889,806






FleetCor Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(In Thousands)
 
 
 
Six Months Ended June 30,
 
 
2016
 
2015
Operating activities
 
 
 
 
Net income
 
$
224,157

 
$
192,831

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation
 
16,311

 
15,096

Stock-based compensation
 
32,620

 
30,500

Provision for losses on accounts receivable
 
13,729

 
13,022

Amortization of deferred financing costs and discounts
 
3,651

 
3,517

Amortization of intangible assets
 
66,114

 
80,186

Amortization of premium on receivables
 
2,339

 
1,627

Deferred income taxes
 
(9,248
)
 
(40,894
)
Equity method investment (income) loss
 
(4,991
)
 
7,818

Other non-cash operating income
 
(446
)
 
(772
)
Changes in operating assets and liabilities (net of acquisitions):
 
 
 
 
Restricted cash
 
13,555

 
5,790

Accounts receivable
 
(385,451
)
 
(233,528
)
Prepaid expenses and other current assets
 
(4,636
)
 
24

Other assets
 
(9,362
)
 
(2,961
)
Excess tax benefits related to stock-based compensation
 
(3,186
)
 
(9,639
)
Accounts payable, accrued expenses and customer deposits
 
253,700

 
135,795

Net cash provided by operating activities
 
208,856

 
198,412

Investing activities
 
 
 
 
Acquisitions, net of cash acquired
 
(13,167
)
 
(7,954
)
Purchases of property and equipment
 
(24,757
)
 
(16,234
)
Net cash used in investing activities
 
(37,924
)
 
(24,188
)
Financing activities
 
 
 
 
Excess tax benefits related to stock-based compensation
 
3,186

 
9,639

Proceeds from issuance of common stock
 
7,964

 
7,105

Repurchase of common stock
 
(26,037
)
 
—

Borrowings on securitization facility, net
 
99,000

 
89,000

Principal payments on notes payable
 
(51,750
)
 
(51,750
)
Borrowings from revolver — A Facility
 
140,000

 
—

Payments on revolver — A Facility
 
(290,000
)
 
(276,818
)
Borrowings from swing line of credit, net
 
—

 
9,441

Payment of contingent consideration
 
—

 
(39,808
)
Other
 
(666
)
 
(145
)
Net cash used in financing activities
 
(118,303
)
 
(253,336
)
Effect of foreign currency exchange rates on cash
 
(6,696
)
 
(13,782
)
Net increase (decrease) in cash and cash equivalents
 
45,933

 
(92,894
)
Cash and cash equivalents, beginning of period
 
447,152

 
477,069

Cash and cash equivalents, end of period
 
$
493,085

 
$
384,175

Supplemental cash flow information
 
 
 
 
Cash paid for interest
 
$
30,361

 
$
38,883

Cash paid for income taxes
 
$
64,345

 
$
30,234






Exhibit 1
RECONCILIATION OF NON-GAAP MEASURES AND PRO FORMA INFORMATION
(In thousands, except shares and per share amounts)
(Unaudited)
The following table reconciles revenues, net to adjusted revenues:
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2016
 
2015
 
2016
 
2015
Revenues, net
 
$
417,905

 
$
404,605

 
$
832,167

 
$
820,771

Merchant commissions
 
22,308

 
21,725

 
50,541

 
49,051

Total adjusted revenues
 
$
395,597

 
$
382,880

 
$
781,626

 
$
771,720

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,
 
 
2016
 
2015
 
2016
 
2015
Net income
 
$
114,185

 
$
98,678

 
$
224,157

 
$
192,831

Stock based compensation
 
17,434

 
13,549

 
32,620

 
30,500

Amortization of intangible assets
 
38,752

 
40,415

 
66,114

 
80,186

Amortization of premium on receivables
 
1,349

 
814

 
2,339

 
1,627

Amortization of deferred financing costs and discounts
 
1,829

 
1,773

 
3,651

 
3,517

Amortization of intangibles at equity method investment
 
2,824

 
2,667

 
5,127

 
5,372

Non recurring net gain at equity method investment
 
(10,845
)
 
—

 
(10,845
)
 
—

Total pre-tax adjustments
 
51,343

 
59,218

 
99,006

 
121,202

Income tax impact of pre-tax adjustments at the effective tax rate*
 
(18,427
)
 
(18,999
)
 
(31,809
)
 
(39,179
)
Adjusted net income
 
$
147,101

 
$
138,898

 
$
291,354

 
$
274,854

Adjusted net income per diluted share
 
$
1.56

 
$
1.48

 
$
3.09

 
$
2.92

Diluted shares
 
94,549

 
94,050

 
94,437

 
93,992

 
* 
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.






Exhibit 2
Transaction Volume, Revenues and Adjusted Revenue, Per Transaction and by Segment
(In thousands except revenues, net per transaction and adjusted revenues per transaction)
(Unaudited)
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
 
2016
 
2015
 
Change
 
% Change
 
2016
 
2015
 
Change
 
% Change
 
NORTH AMERICA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
'- Transactions2
 
411,611

 
389,410

 
22,201

 
5.7
 %
 
846,093

 
774,194

 
71,899

 
9.3
 %
 
'- Revenues, net per transaction
 
$
0.73

 
$
0.73

 
$
—

 
0.1
 %
 
$
0.71

 
$
0.75

 
$
(0.04
)
 
(5.1
)%
 
'- Revenues, net
 
$
301,126

 
$
284,576

 
$
16,550

 
5.8
 %
 
$
604,674

 
$
583,389

 
$
21,285

 
3.6
 %
 
INTERNATIONAL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
'- Transactions
 
53,412

 
45,674

 
7,738

 
16.9
 %
 
105,950

 
92,453

 
13,497

 
14.6
 %
 
'- Revenues, net per transaction
 
$
2.19

 
$
2.63

 
$
(0.44
)
 
(16.8
)%
 
$
2.15

 
$
2.57

 
$
(0.42
)
 
(16.4
)%
 
'- Revenues, net
 
$
116,779

 
$
120,029

 
$
(3,250
)
 
(2.7
)%
 
$
227,493

 
$
237,382

 
$
(9,889
)
 
(4.2
)%
 
FLEETCOR CONSOLIDATED REVENUES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
'- Transactions2
 
465,023

 
435,084

 
29,939

 
6.9
 %
 
952,043

 
866,647

 
85,396

 
9.9
 %
 
'- Revenues, net per transaction
 
$
0.90

 
$
0.93

 
$
(0.03
)
 
(3.4
)%
 
$
0.87

 
$
0.95

 
$
(0.07
)
 
(7.7
)%
 
'- Revenues, net
 
$
417,905

 
$
404,605

 
$
13,300

 
3.3
 %
 
$
832,167

 
$
820,771

 
$
11,396

 
1.4
 %
 
FLEETCOR CONSOLIDATED ADJUSTED REVENUES1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
'- Transactions2
 
465,023

 
435,084

 
29,939

 
6.9
 %
 
952,043

 
866,647

 
85,396

 
9.9
 %
 
'- Adjusted revenues per transaction
 
$
0.85

 
$
0.88

 
$
(0.03
)
 
(3.3
)%
 
$
0.82

 
$
0.89

 
$
(0.07
)
 
(7.8
)%
 
'- Adjusted revenues
 
$
395,597

 
$
382,880

 
$
12,717

 
3.3
 %
 
$
781,626

 
$
771,720

 
$
9,906

 
1.3
 %
 
 
1 

Adjusted revenues is a non-GAAP financial measure defined as revenues, net less merchant commissions. The Company believes this measure is a more effective way to evaluate the Company’s revenue performance. Refer to Exhibit 1 for a reconciliation of revenues, net to adjusted revenues.
2 

Includes approximately 313 million and 296 million transactions for the three months ended June 30, 2016 and 2015, respectively, and approximately 655 million and 597 million transactions for the six months ended June 30, 2016 and 2015, respectively, related to our SVS business acquired with Comdata in the fourth quarter of 2014.
 
Sources of Revenue3
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
 
2016
 
2015
 
Change
 
% Change
 
2016
 
2015
 
Change
 
% Change
 
Revenue from customers and partners
 
54.2
%
 
52.7
%
 
1.5
 %
 
2.8
 %
 
54.4
%
 
52.1
%
 
2.3
 %
 
4.4
 %
 
Revenue from merchants and networks
 
45.8
%
 
47.3
%
 
(1.5
)%
 
(3.2
)%
 
45.6
%
 
47.9
%
 
(2.3
)%
 
(4.8
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue directly tied to fuel-price spreads
 
9.8
%
 
10.3
%
 
(0.5
)%
 
(4.9
)%
 
11.2
%
 
12.0
%
 
(0.8
)%
 
(6.7
)%
 
Revenue directly influenced by absolute price of fuel
 
15.0
%
 
16.5
%
 
(1.5
)%
 
(9.1
)%
 
14.4
%
 
15.6
%
 
(1.2
)%
 
(7.7
)%
 
Revenue from program fees, late fees, interest and other
 
75.2
%
 
73.2
%
 
2.0
 %
 
2.7
 %
 
74.4
%
 
72.4
%
 
2.0
 %
 
2.8
 %
 
 
3 

Expressed as a percentage of consolidated revenue.





Exhibit 3
Segment Results
(In thousands)
(Unaudited)
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2016
 
2015
 
2016
 
2015
Revenues, net:
 
 
 
 
 
 
 
 
North America
 
$
301,126

 
$
284,576

 
$
604,674

 
$
583,389

International
 
116,779

 
120,029

 
227,493

 
237,382

 
 
$
417,905

 
$
404,605

 
$
832,167

 
$
820,771

Operating income:
 
 
 
 
 
 
 
 
North America
 
$
117,611

 
$
109,584

 
$
231,461

 
$
219,350

International
 
53,557

 
59,567

 
115,662

 
113,575

 
 
$
171,168

 
$
169,151

 
$
347,123

 
$
332,925

Depreciation and amortization:
 
 
 
 
 
 
 
 
North America
 
$
32,180

 
$
32,021

 
$
63,612

 
$
63,943

International
 
16,256

 
16,806

 
21,152

 
32,966

 
 
$
48,436

 
$
48,827

 
$
84,764

 
$
96,909

Capital expenditures:
 
 
 
 
 
 
 
 
North America
 
$
8,579

 
$
3,793

 
$
16,521

 
$
8,017

International
 
4,439

 
4,336

 
8,236

 
8,217

 
 
$
13,018

 
$
8,129

 
$
24,757

 
$
16,234






































Exhibit 4
RECONCILIATION OF NON-GAAP GUIDANCE MEASURES
(In millions, except per share amounts)
(Unaudited)

The following table reconciles 2016 financial guidance for net income to adjusted net income and adjusted net income per diluted share, at both ends of the range:

 
 
2016 Guidance
 
 
Low*
 
High*
Net income
 
$
475

 
$
486

Net income per diluted share
 
$
5.02

 
$
5.12

 
 
 
 
 
Stock based compensation
 
66

 
66

Amortization of intangible assets, premium on receivables, deferred financing costs and discounts
 
157

 
157

Amortization of intangibles at equity method investment
 
10

 
10

Non recurring net gain at equity method investment
 
(11
)
 
(11
)
Total pre-tax adjustments
 
221

 
221

Income tax impact of pre-tax adjustments at the effective tax rate**
 
(67
)
 
(67
)
Adjusted net income
 
$
627

 
$
640

Adjusted net income per diluted share
 
$
6.61

 
$
6.75

 
 
 
 
 
Diluted shares
 
95

 
95

 
 
 
 
 
* 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 reversed during 2016.





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