FleetCor Completes Acquisition of STP
The Company Updates Outlook for Fiscal Year 2016
“We are thrilled to announce the completion of the STP acquisition, the
second-largest transaction ever for FleetCor,” said
STP, which operates under the brand Sem Parar, is Brazil’s leading
electronic toll payments company, with near universal acceptance
nationally. Using RFID technology, STP-issued tags and stickers process
Updated Fiscal Year 2016 Outlook:
For fiscal-year 2016,
Total revenues between
$1,820 million and $1,870 million;
Adjusted net income per diluted share1 between
$6.75 and $6.91.
1 A reconciliation of GAAP guidance is provided in Exhibit 1.
This press release contains forward-looking statements within the
meaning of the federal securities laws. Statements that are not
historical facts, including statements about
About Non-GAAP Financial Measures
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. We prepare adjusted net income to eliminate the effect of items that we do not consider indicative of our core operating performance. Adjusted net income is a supplemental measure of operating performance that does not represent and should not be considered as an alternative 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. A reconciliation of GAAP to non-GAAP guidance is provided in the attached exhibit 1.
Management uses adjusted revenues and adjusted net income:
- As a measurement of operating performance because it assists 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 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.
|RECONCILIATION OF NON-GAAP GUIDANCE MEASURES|
|(In millions, except per share amounts)|
|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:|
|Net income per diluted share||$||5.02||$||5.15|
|Stock based compensation||66||66|
|Amortization of intangible assets, premium on receivables, deferred financing costs and discounts***||175||175|
|Amortization of intangibles at equity method investment||10||10|
|Non recurring net gain at equity method investment||(11||)||(11||)|
|Total pre-tax adjustments||240||240|
|Income tax impact of pre-tax adjustments at the effective tax rate**||(75||)||(75||)|
|Adjusted net income||$||639||$||652|
|Adjusted net income per diluted share||$||6.75||$||6.91|
|* Columns may not calculate due to impact of rounding and range.|
** 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.
*** Amortization is subject to the completion of purchase accounting for STP and represents estimate.