FLEETCOR Reports Second Quarter 2018 Financial Results

August 2, 2018

PEACHTREE CORNERS, Ga.--(BUSINESS WIRE)--Aug. 2, 2018-- FLEETCOR Technologies, Inc. (NYSE:FLT), a leading global provider of commercial payment solutions, today reported financial results for its second quarter of 2018.

“Our second quarter revenues and profits once again finished above our expectations, with adjusted net income per diluted share growth of 29%. We delivered another solid organic revenue growth quarter of 9% overall, driven by growth rates of more than 20% in the Lodging, Corporate Payments and Tolls business lines. Additionally, we were delighted to join the S&P 500 index, and to be recognized for our consistent performance over a long period of time,” said Ron Clarke, chairman and chief executive officer, FLEETCOR Technologies, Inc.

Financial Results for Second Quarter of 2018:

GAAP Results

Total revenues, including the impact of the new revenue recognition standard ASC 606, increased 8% to $585.0 million in the second quarter of 2018, compared to $541.2 million in the second quarter of 2017.
Net incomeincreased 35% to $176.9 million in the second quarter of 2018, compared to $131.0 million in the second quarter of 2017.
Net incomeper diluted share increased 37% to $1.91 in the second quarter of 2018, compared to $1.39 per diluted share in the second quarter of 2017.

On January 1, 2018, the Company adopted FASB ASC Topic 606, "Revenue from Contracts with Customers" ("ASC 606") and related cost capitalization guidance, using the modified retrospective method by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to opening retained earnings at January 1, 2018. As such, the Company is not required to restate comparative financial information prior to the adoption of ASC 606 and, therefore, such information for the three months ended June 30, 2017 continues to be reported under FASB ASC Topic 605, "Revenue Recognition" ("ASC 605"). The adoption of ASC 606 did not materially impact the Company’s financial position. For the three months ended June 30, 2018, the adoption of ASC 606 reduced revenue by $23.3 million and increased operating income by $0.7 million. The adoption of ASC 606 did not have a material impact on net income or net income per diluted share for the three months ended June 30, 2018. A comparison of the current presentation under ASC 606 to the prior presentation under ASC 605 is provided below:

	2018 Reported under ASC 606	2018 Impact of ASC 606	2018 Excluding Impact of Adoption of ASC 606
(millions)
Revenue	$585.0	$23.3	$608.3

Operating Expense	$320.2	$24.1	$344.3

Operating Income	$264.8	($0.7)	$264.0

The above table presents the U.S. GAAP financial measures of Revenue, Operating Expense and Operating Income as reported, as well as the impact of the adoption of ASC 606 on these measures for the period presented. The impact of the adoption of ASC 606 on net income and net income per diluted share was not material.

Non-GAAP Results¹

Revenues under ASC 605 increased 12% to $608.3 million in the second quarter of 2018, compared to $541.2 million in the second quarter of 2017.
Adjusted net income¹ increased 27% to $237.8 million in the second quarter of 2018, compared to $187.0 million in the second quarter of 2017.
Adjusted net income per diluted share¹ increased 29% to $2.57 in the second quarter of 2018, compared to $1.99 per diluted share in the second quarter of 2017.

Fiscal-Year 2018 Outlook:

“We are raising our 2018 guidance to reflect our strong second quarter results compared to our original outlook, despite the unfavorable macro that we now expect to realize for the remainder of the year. We believe that negative movements in foreign exchange rates, will more than offset the impact of favorable fuel prices, producing an overall unfavorable impact on second half revenue of approximately $30 to $40 million,” said Eric Dey, chief financial officer, FLEETCOR Technologies, Inc. “We currently expect to offset this impact through continued over performance in some of our businesses, lower expenses, and the impact from a lower share count in the second half of the year.”

For fiscal 2018, FLEETCOR Technologies, Inc. updated financial guidance is as follows:

Revenues including the adoption of ASC 606, between $2,365 million and $2,415 million;
Net income between $720 million and $740 million;
Net income per diluted share between $7.75 and $7.95;
Revenues under ASC 605 between $2,470 million and $2,520 million;
Adjusted net income¹ between $960 million and $980 million; and
Adjusted net income per diluted share¹ between $10.32 and $10.52.

FLEETCOR’s guidance assumptions for 2018 are as follows:

Weighted fuel prices equal to $2.88 per gallon average in the U.S. for those businesses sensitive to the movement in the retail price of fuel for the balance of the year;
Market spreads equal to the 2017 average;
Foreign exchange rates equal to the seven-day average as of July 1, 2018;
Interest expense of $135 million;
Fully diluted shares outstanding of approximately 93 million shares;
A tax rate of 22 to 24%; and
No impact related to acquisitions or material new partnership agreements not already disclosed.

_______________________________________

¹ Reconciliations of GAAP results to non-GAAP results are provided in Exhibit 1 attached. Additional supplemental data is provided in Exhibits 2-3 and 5, and segment information is provided in Exhibit 4. A reconciliation of GAAP guidance to non-GAAP guidance is provided in Exhibit 6. A reconciliation of the impact of the adoption of ASC 606 is provided in exhibit 7.

Conference Call

The Company will host a conference call to discuss second quarter 2018 financial results today at 5:00 pm ET. Hosting the call will be Ron Clarke, chief executive officer, Eric Dey, chief financial officer and Jim Eglseder, investor relations. 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 13681872. The replay will be available until Thursday, August 9, 2018. The call will be webcast live from the Company's investor relations website at http://investor.fleetcor.com. Prior to the conference call, the Company will post supplemental financial information that will be discussed during the call and live webcast.

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, expected organic growth rates, impact of the new Tax Act, and estimated impact of these conditions on our operations and financial results, the impact of new asset initiatives, revenue and earnings guidance and assumptions underlying financial guidance, and statements regarding the unauthorized access to the Company’s systems, including the assumptions with respect to the investigation of the incident to date. 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: risks related to the unauthorized access to systems and information; 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, 2017 and FLEETCOR’s quarterly report on form 10-Q for the three months ended March 31, 2018. 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 except as specifically stated in this press release or to the extent required by law.

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, amortization of the premium recognized on the purchase of receivables, and our proportionate share of amortization of intangible assets at our equity method investment, (c) other non-recurring items, including the impact of the Tax Reform Act, restructuring costs, and the unauthorized access impact. We calculate 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 to 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, losses, and impairment charges do not necessarily reflect how our investments and business are 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 GAAP to non-GAAP guidance is provided in the attached exhibit 6. Furthermore, a reconciliation of the impact of the Company’s adoption of the new revenue standard, ASC 606, is provided in exhibit 7, along with its impact on 2018 guidance in exhibit 6.

Management uses adjusted net income:

as 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.

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, FLEETCOR provides 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,
		2018(1)		2017			2018(1)		2017

Revenues, net		$	584,985	$	541,237		$	1,170,484	$	1,061,670

Expenses:
	Merchant commissions		-		30,619			-		55,003
	Processing		111,201		103,322			227,686		205,146
	Selling		44,009		38,957			91,120		77,794
	General and administrative		96,382		87,587			186,696		183,041
	Depreciation and amortization		68,610		64,709			140,112		129,575
Operating income			264,783		216,043			524,870		411,111
	Investment loss		-		2,354			-		4,731
	Other expense (income), net		458		(551	)		161		1,645
	Interest expense, net		33,150		23,851			64,215		46,978
Total other expense			33,608		25,654			64,376		53,354
Income before income taxes			231,175		190,389			460,494		357,757
Provision for income taxes			54,323		59,402			108,705		103,077
Net income		$	176,852	$	130,987		$	351,789	$	254,680

Basic earnings per share		$	1.98	$	1.42		$	3.93	$	2.77
Diluted earnings per share		$	1.91	$	1.39		$	3.78	$	2.70

Weighted average shares outstanding:
Basic shares			89,169		92,013			89,466		92,060
Diluted shares			92,702		94,223			92,970		94,392

¹Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606") and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effective of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect ASC 606. See exhibit 7 for a reconciliation of the impact of adoption of ASC 606.

FLEETCOR Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and par value amounts)

		June 30, 2018¹			December 31, 2017
		(Unaudited)
Assets

Current assets:
	Cash and cash equivalents	$	919,662		$	913,595
	Restricted cash		265,776			217,275
	Accounts and other receivables (less allowance for doubtful accounts of $48,245 at June 30, 2018 and $46,031 at December 31, 2017, respectively)		1,716,937			1,420,011
	Securitized accounts receivable - restricted for securitization investors		939,000			811,000
	Prepaid expenses and other current assets		207,832			187,820

Total current assets			4,049,207			3,549,701

Property and equipment, net			179,096			180,057
Goodwill			4,556,206			4,715,823
Other intangibles, net			2,515,232			2,724,957
Investments			39,859			32,859
Other assets			145,533			114,962

Total assets		$	11,485,133		$	11,318,359

Liabilities and Stockholders’ Equity

Current liabilities:
	Accounts payable	$	1,532,741		$	1,437,314
	Accrued expenses		214,682			238,472
	Customer deposits		852,617			732,171
	Securitization facility		939,000			811,000
	Current portion of notes payable and lines of credit		976,685			805,512
	Other current liabilities		85,789			71,033

Total current liabilities			4,601,514			4,095,502

Notes payable and other obligations, less current portion			2,832,316			2,902,104
Deferred income taxes			498,918			518,912
Other noncurrent liabilities			113,300			125,319

Total noncurrent liabilities			3,444,534			3,546,335

Commitments and contingencies

Stockholders’ equity:
	Common stock, $0.001 par value; 475,000,000 shares authorized; 122,551,794 shares issued and 88,376,611 shares outstanding at June 30, 2018; and 122,083,059 shares issued and 89,803,982 shares outstanding at December 31, 2017		123			122
	Additional paid-in capital		2,277,227			2,214,224
	Retained earnings		3,357,962			2,958,921
	Accumulated other comprehensive loss		(870,688	)		(551,857	)
	Less treasury stock, 34,175,183 shares at June 30, 2018 and 32,279,077 shares at December 31, 2017		(1,325,539	)		(944,888	)

Total stockholders’ equity			3,439,085			3,676,522

Total liabilities and stockholders’ equity		$	11,485,133		$	11,318,359

¹Reflects the impact of the Company's adoption of ASC 606 and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effective of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect ASC 606. See exhibit 7 for a reconciliation of the impact of adoption of ASC 606.

FLEETCOR Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(In thousands)

	Six Months Ended June 30,
	2018(1)		2017(1)

Operating activities
Net income	$	351,789	$	254,680
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		25,033		21,593
Stock-based compensation		33,505		44,243
Provision for losses on accounts receivable		26,495		27,648
Amortization of deferred financing costs and discounts		2,678		3,800
Amortization of intangible assets		112,540		104,894
Amortization of premium on receivables		2,539		3,088
Deferred income taxes		(6,473)		(32,660)
Investment loss		-		4,731
Other non-cash operating income		(104)		-
Changes in operating assets and liabilities (net of acquisitions):
Accounts and other receivables		(519,527)		(380,196)
Prepaid expenses and other current assets		(20,440)		(18,778)
Other assets		(15,418)		(15,050)
Accounts payable, accrued expenses and customer deposits		282,472		189,750
Net cash provided by operating activities		275,089		207,743


Investing activities
Acquisitions, net of cash acquired		(3,811)		(3,580)
Purchases of property and equipment		(34,614)		(32,600)
Other		(11,192)		(6,327)
Net cash used in investing activities		(49,617)		(42,507)


Financing activities
Proceeds from issuance of common stock		29,498		16,432
Repurchase of common stock		(380,651)		(52,393)
Borrowings on securitization facility, net		128,000		150,000
Principal payments on notes payable		(69,000)		(66,725)
Borrowings from revolver		774,019		90,000
Payments on revolver		(600,109)		(215,901)
Borrowings on swing line of credit, net		13,632		10,245
Other		(149)		537
Net cash used by financing activities		(104,760)		(67,805)

Effect of foreign currency exchange rates on cash		(66,144)		24,416

Net increase in cash and cash equivalents and restricted cash		54,568		121,847
Cash and cash equivalents and restricted cash, beginning of period		1,130,870		643,770
Cash and cash equivalents and restricted cash, end of period	$	1,185,438	$	765,617

Supplemental cash flow information
Cash paid for interest	$	73,303	$	68,431

Cash paid for income taxes	$	112,982	$	188,157

¹Reflects the impact of the Company's adoption of Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230), which was adopted by the Company on January 1, 2018 and applied retrospectively to results for 2017. The adoption of Topic 230 resulted in the statement of cash flows presenting the changes in the total of cash, cash equivalents and restricted cash. As a result, the Company will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows.

Exhibit 1
RECONCILIATION OF NON-GAAP MEASURES
(In thousands, except shares and per share amounts)
(Unaudited)

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,
	2018			2017				2018			2017
Net income	$	176,852		$	130,987			$	351,789		$	254,680

Stock based compensation		19,102			21,150				33,505			44,243
Amortization of intangible assets, premium on receivables, deferred financing costs and discounts		57,313			58,587				117,757			117,158
Restructuring costs		1,506			-				3,435			-
Unauthorized access impact		1,743			-				1,743			-
Total pre-tax adjustments		79,664			79,737				156,441			161,401

Income tax impact of pre-tax adjustments at the effective tax rate		(18,720	)		(23,675	)	(1)		(36,927	)		(44,055	)	(1)

Adjusted net income	$	237,796		$	187,049			$	471,303		$	372,026
Adjusted net income per diluted share	$	2.57		$	1.99			$	5.07		$	3.94

Diluted shares		92,702			94,223				92,970			94,392

⁽¹⁾Excludes the results of the Company's Masternaut investment on our effective tax rate, as results from our Masternaut investment are reported within the consolidated statements of income on a post-tax basis and no tax-over-book outside basis differences related to our equity method investment reversed during 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									As Reported and Pro Forma for Impact of Adoption of ASC 606
		Three Months Ended June 30,									Three Months Ended June 30,
		2018(1)		2017		Change			% Change		2018(1)		2017(1)		Change			% Change

	NORTH AMERICA
	- Transactions		426.9		429.7		(2.8	)	(1	%)		426.9		429.7		(2.8	)	(1	%)
	- Revenues, net per transaction	$	0.87	$	0.80	$	0.07		9	%	$	0.87	$	0.73	$	0.13		18	%
	- Revenues, net	$	370.9	$	343.0	$	28.0		8	%	$	370.9	$	315.7	$	55.3		18	%

	INTERNATIONAL
	- Transactions ²		264.2		265.5		(1.3	)	(1	%)		264.2		265.5		(1.3	)	(1	%)
	- Revenues, net per transaction	$	0.81	$	0.75	$	0.06		9	%	$	0.81	$	0.73	$	0.08		11	%
	- Revenues, net	$	214.0	$	198.2	$	15.8		8	%	$	214.0	$	193.5	$	20.6		11	%


	FLEETCOR CONSOLIDATED REVENUES
	- Transactions		691.1		695.3		(4.1	)	(1	%)		691.1		695.3		(4.1	)	(1	%)
	- Revenues, net per transaction	$	0.85	$	0.78	$	0.07		9	%	$	0.85	$	0.73	$	0.11		16	%
	- Revenues, net	$	585.0	$	541.2	$	43.7		8	%	$	585.0	$	509.1	$	75.9		15	%


The following table presents revenue and revenue per transaction, by product category.
		As Reported									Pro Forma and Macro Adjusted⁴
		Three Months Ended June 30,									Three Months Ended June 30,
		2018(1)		2017		Change			% Change		2018(1)		2017(1)		Change			% Change

	FUEL⁵
	- Transactions		122.1		116.8		5.3		5	%		122.1		118.5		3.6		3	%
	- Revenues, net per transaction	$	2.22	$	2.38	$	(0.16	)	(7	%)	$	2.15	$	2.10	$	0.04		2	%
	- Revenues, net	$	270.8	$	278.2	$	(7.4	)	(3	%)	$	261.9	$	249.4	$	12.5		5	%

	CORPORATE PAYMENTS
	- Transactions		11.8		10.4		1.5		14	%		11.8		10.6		1.2		11	%
	- Revenues, net per transaction	$	8.44	$	4.85	$	3.59		74	%	$	8.35	$	7.70	$	0.65		8	%
	- Revenues, net	$	99.6	$	50.2	$	49.4		98	%	$	98.5	$	81.7	$	16.9		21	%

	TOLLS
	- Transactions ²		209.3		216.7		(7.4	)	(3	%)		209.3		216.7		(7.4	)	(3	%)
	- Revenues, net per transaction	$	0.39	$	0.35	$	0.04		11	%	$	0.44	$	0.35	$	0.09		24	%
	- Revenues, net	$	81.5	$	76.0	$	5.6		7	%	$	91.3	$	76.0	$	15.3		20	%

	LODGING
	- Transactions		4.7		3.4		1.4		40	%		4.7		3.9		0.9		23	%
	- Revenues, net per transaction	$	9.40	$	8.57	$	0.84		10	%	$	9.40	$	9.08	$	0.32		4	%
	- Revenues, net	$	44.6	$	29.0	$	15.7		54	%	$	44.6	$	35.2	$	9.5		27	%

	GIFT
	- Transactions		324.5		328.3		(3.9	)	(1	%)		324.5		328.3		(3.9	)	(1	%)
	- Revenues, net per transaction	$	0.10	$	0.13	$	(0.02	)	(18	%)	$	0.10	$	0.13	$	(0.02	)	(18	%)
	- Revenues, net	$	33.3	$	41.3	$	(8.0	)	(19	%)	$	33.3	$	41.3	$	(8.0	)	(19	%)

	OTHER^3,5
	- Transactions		18.7		19.7		(1.0	)	(5	%)		18.7		19.3		(0.6	)	(3	%)
	- Revenues, net per transaction	$	2.94	$	3.37	$	(0.43	)	(13	%)	$	2.96	$	2.80	$	0.16		6	%
	- Revenues, net	$	55.1	$	66.6	$	(11.5	)	(17	%)	$	55.5	$	54.1	$	1.4		3	%


	FLEETCOR CONSOLIDATED REVENUES
	- Transactions		691.1		695.3		(4.1	)	(1	%)		691.1		697.3		(6.2	)	(1	%)
	- Revenues, net per transaction	$	0.85	$	0.78	$	0.07		9	%	$	0.85	$	0.77	$	0.08		10	%
	- Revenues, net	$	585.0	$	541.2	$	43.7		8	%	$	585.2	$	537.5	$	47.6		9	%


1 Reflects the impact of the Company's adoption of ASC 606 and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effective of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect ASC 606. For purposes of comparability, 2017 revenue has been recast in this exhibit and is reconciled to GAAP in Exhibit 5, which includes certain estimates and assumptions made by the Company for the impact of ASC 606 on 2017 revenues, as the Company did not apply a full retrospective adoption.
2 Reflects adjustments from previously disclosed amounts for the prior period to conform to current presentation.
3 Other includes telematics, maintenance, food, and transportation related businesses.
4 See Exhibit 5 for a reconciliation of Pro forma and Macro Adjusted revenue by product, non gaap measures, to the gaap equivalent.
5 Fuel Cards product category further refined to Fuel, to reflect different ways that fuel is paid for by our customers and as a result, reflects immaterial reclassifications from previously disclosed amounts for the prior period.

Exhibit 3 Revenues by Geography, Product and Source (In millions) (Unaudited)

Revenue by Geography*		Three Months Ended June 30,							Six Months Ended June 30,
		2018(1)		%		2017		%	2018(1)		%		2017		%

	US	$	348	59	%	$	343	63%	$	691	59	%	$	673	63%
	Brazil		96	16	%		93	17%		203	17	%		186	18%
	UK		65	11	%		58	11%		130	11	%		112	11%
	Other		76	13	%		47	9%		146	12	%		90	8%

	Consolidated Revenues, net	$	585	100	%	$	541	100%	$	1,170	100	%	$	1,062	100%
* Columns may not calculate due to rounding.

Revenue by Product Category*		Three Months Ended June 30,							Six Months Ended June 30,
		2018(1)		%		2017		%	2018(1)		%		2017		%

	Fuel	$	271	46	%	$	278	51%	$	529	45	%	$	539	51%
	Corporate Payments		100	17	%		50	9%		194	17	%		97	9%
	Tolls		82	14	%		76	14%		173	15	%		153	14%
	Lodging		45	8	%		29	5%		84	7	%		53	5%
	Gift		33	6	%		41	8%		82	7	%		90	8%
	Other		55	9	%		67	12%		108	9	%		131	12%

	Consolidated Revenues, net	$	585	100	%	$	541	100%	$	1,170	100	%	$	1,062	100%
* Columns may not calculate due to rounding.

Major Sources of Revenue*		Three Months Ended June 30,							Six Months Ended June 30,
		2018(1)		%		2017		%	2018(1)		%		2017		%

	Processing and Program Revenue²	$	299	51	%	$	248	46%	$	611	52	%	$	493	46%
	Late Fees and Finance Charges³		36	6	%		34	6%		72	6	%		71	7%
	Miscellaneous Fees⁴		39	7	%		33	6%		74	6	%		65	6%
	Discount Revenue (Fuel)⁵		85	15	%		74	14%		170	15	%		146	14%
	Discount Revenue (NonFuel)⁶		46	8	%		44	8%		89	8	%		85	8%
	Tied to Fuel-Price Spreads⁷		29	5	%		62	12%		55	5	%		112	11%
	Merchant Program Revenue⁸		51	9	%		47	9%		101	9	%		91	9%
Consolidated Revenues, net		$	585	100	%	$	541	100%	$	1,170	100	%	$	1,062	100%

¹Reflects the impact of the Company's adoption of ASC 606 and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effective of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect ASC 606. See exhibit 7 for a reconciliation of the impact of adoption of ASC 606.
² 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.
³Fees for late payment and interest charges for carrying a balance charged to a customer.
⁴Non-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.
⁵Interchange revenue directly influenced by the absolute price of fuel and other interchange related to fuel products.
⁶ Interchange revenue related to nonfuel products.
⁷ 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.
⁸ Revenue derived primarily from the sale of equipment, software and related maintenance to merchants.
* 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 rounding.

Exhibit 4
Segment Results
(In thousands)
(Unaudited)

		Three Months Ended June 30,				Six Months Ended June 30,
		2018(1)		2017		2018(1)		2017
Revenues, net:
	North America	$	370,949	$	342,995	$	735,218	$	672,943
	International		214,036		198,242		435,266		388,727
		$	584,985	$	541,237	$	1,170,484	$	1,061,670

Operating income:
	North America	$	161,376	$	134,926	$	317,326	$	255,898
	International		103,407		81,117		207,544		155,213
		$	264,783	$	216,043	$	524,870	$	411,111

Depreciation and amortization:
	North America	$	38,317	$	33,384	$	76,992	$	66,561
	International		30,293		31,325		63,120		63,014
		$	68,610	$	64,709	$	140,112	$	129,575

Capital expenditures:
	North America	$	11,685	$	12,102	$	20,096	$	21,734
	International		7,715		5,702		14,518		10,866
		$	19,400	$	17,804	$	34,614	$	32,600


¹Reflects the impact of the Company's adoption of ASC 606 and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effective of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect ASC 606. See exhibit 7 for a reconciliation of the impact of adoption of ASC 606.

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,
		2018*			2017*			2018*	2017*

	FUEL
	Pro forma and macro adjusted	$	261.9		$	249.4		122.1	118.5
	Impact of acquisitions/dispositions		-			(2.2	)	-	(1.7	)
	Impact of fuel prices/spread		6.3			-		-	-
	Impact of foreign exchange rates		2.6			-		-	-
	Impact of adoption of ASC 606		-			31.0		-	-
	As reported	$	270.8		$	278.2		122.1	116.8

	CORPORATE PAYMENTS
	Pro forma and macro adjusted	$	98.5		$	81.7		11.8	10.6
	Impact of acquisitions/dispositions		-			(32.1	)	-	(0.3	)
	Impact of fuel prices/spread		0.2			-		-	-
	Impact of foreign exchange rates		0.9			-		-	-
	Impact of adoption of ASC 606		-			0.6		-	-
	As reported	$	99.6		$	50.2		11.8	10.4

	TOLLS
	Pro forma and macro adjusted	$	91.3		$	76.0		209.3	216.7
	Impact of acquisitions/dispositions		-			-		-	-
	Impact of fuel prices/spread		-			-		-	-
	Impact of foreign exchange rates		(9.8	)		-		-	-
	Impact of adoption of ASC 606		-			-		-	-
	As reported	$	81.5		$	76.0		209.3	216.7

	LODGING
	Pro forma and macro adjusted	$	44.6		$	35.2		4.7	3.9
	Impact of acquisitions/dispositions		-			(6.2	)	-	(0.5	)
	Impact of fuel prices/spread		-			-		-	-
	Impact of foreign exchange rates		-			-		-	-
	Impact of adoption of ASC 606		-			-		-	-
	As reported	$	44.6		$	29.0		4.7	3.4

	GIFT
	Pro forma and macro adjusted	$	33.3		$	41.3		324.5	328.3
	Impact of acquisitions/dispositions		-			-		-	-
	Impact of fuel prices/spread		-			-		-	-
	Impact of foreign exchange rates		-			-		-	-
	Impact of adoption of ASC 606		-			-		-	-
	As reported	$	33.3		$	41.3		324.5	328.3

	OTHER¹
	Pro forma and macro adjusted	$	55.5		$	54.1		18.7	19.3
	Impact of acquisitions/dispositions		-			12.0		-	0.4
	Impact of fuel prices/spread		-			-		-	-
	Impact of foreign exchange rates		(0.4	)		-		-	-
	Impact of adoption of ASC 606		-			0.5		-	-
	As reported	$	55.1		$	66.6		18.7	19.7


	FLEETCOR CONSOLIDATED REVENUES
	Pro forma and macro adjusted	$	585.2		$	537.5		691.1	697.3
	Impact of acquisitions/dispositions		-			(28.4	)	-	(2.0	)
	Impact of fuel prices/spread		6.4			-		-	-
	Impact of foreign exchange rates		(6.6	)		-		-	-
	Impact of adoption of ASC 606		-			32.1		-	-
	As reported	$	585.0		$	541.2		691.1	695.3

* Columns may not calculate due to rounding.
¹Other includes telematics, maintenance and transportation related businesses.

Exhibit 6
RECONCILIATION OF NON-GAAP GUIDANCE MEASURES
(In millions, except per share amounts)
(Unaudited)

The following table reconciles 2018 financial guidance for revenues, net to revenues prior to the adoption of ASC 606 and net income to adjusted net income and adjusted net income per diluted share, at both ends of the range:

	2018 GUIDANCE
	Low*			High*
Revenues, net	$	2,365		$	2,415
Impact of adoption of ASC 606		105			105
Revenues, net prior to adoption of ASC 606	$	2,470		$	2,520

Net income	$	720		$	740
Net income per diluted share	$	7.75		$	7.95

Stock based compensation		72			72
Amortization of intangible assets, premium on receivables, deferred financing costs and discounts		236			236
Restructuring costs		3			3
Unauthorized access impact		2			2
Total pre-tax adjustments		313			313

Income tax impact of pre-tax adjustments at the effective tax rate		(73	)		(73	)

Adjusted net income	$	960		$	980
Adjusted net income per diluted share	$	10.32		$	10.52

Diluted shares		93			93

* Columns may not calculate due to rounding.

Exhibit 7
Reconciliation of Impact of Adoption of ASC 606 to the Consolidated Statement of Income
(In thousands)
(Unaudited)

		Three Months Ended June 30,
		2018 As Reported¹		Impact of ASC 606			2018 Prior to Adoption

Revenues, net		$	584,985	$	23,336		$	608,321

Expenses:
	Merchant commissions		-		26,387			26,387
	Processing		111,201		(2,713	)		108,488
	Selling		44,009		397			44,406
	General and administrative		96,382		-			96,382
	Depreciation and amortization		68,610		-			68,610

Operating income			264,783		(735	)		264,048
Total other expense			33,608		-			33,608
Income before income taxes			231,175		(735	)		230,440
Provision for income taxes			54,323		(91	)		54,232
Net income		$	176,852	$	(644	)	$	176,208

¹Reflects the impact of the Company's adoption of ASC 606 and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effective of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect ASC 606.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180802005712/en/

Source: FLEETCOR Technologies, Inc.

Investor Relations
Jim Eglseder, 770-417-4697
Jim.Eglseder@fleetcor.com

Release Details

FLEETCOR Reports Second Quarter 2018 Financial Results