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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 __________________________________________________________
FORM 10-Q
 _________________________________________________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 001-35004
 __________________________________________________________
FLEETCOR Technologies, Inc.
(Exact name of registrant as specified in its charter)
 __________________________________________________________
Delaware 72-1074903
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
3280 Peachtree RoadAtlantaGeorgia30305
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (770449-0479
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockFLTNYSE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class Outstanding at November 2, 2020
Common Stock, $0.001 par value 83,401,626



Table of Contents

FLEETCOR TECHNOLOGIES, INC. AND SUBSIDIARIES
FORM 10-Q
For the Three and Nine Months Ended September 30, 2020
INDEX
 
  Page
PART I—FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II—OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

i

Table of Contents

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
FLEETCOR Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
(In Thousands, Except Share and Par Value Amounts)
September 30, 2020December 31, 2019
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$788,854 $1,271,494 
Restricted cash582,006 403,743 
Accounts and other receivables (less allowance for credit losses of $83,882 at September 30, 2020 and $70,890 at December 31, 2019)
1,552,695 1,568,961 
Securitized accounts receivable—restricted for securitization investors688,000 970,973 
Prepaid expenses and other current assets359,461 403,400 
Total current assets3,971,016 4,618,571 
Property and equipment, net189,953 199,825 
Goodwill4,613,597 4,833,047 
Other intangibles, net2,115,189 2,341,882 
Investments7,480 30,440 
Other assets196,764 224,776 
Total assets$11,093,999 $12,248,541 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$1,297,236 $1,249,586 
Accrued expenses299,396 275,511 
Customer deposits1,123,974 1,007,631 
Securitization facility688,000 970,973 
Current portion of notes payable and lines of credit645,769 775,865 
Other current liabilities141,432 183,502 
Total current liabilities4,195,807 4,463,068 
Notes payable and other obligations, less current portion3,158,810 3,289,947 
Deferred income taxes506,102 519,980 
Other noncurrent liabilities295,530 263,930 
Total noncurrent liabilities3,960,442 4,073,857 
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.001 par value; 475,000,000 shares authorized; 125,997,304 shares issued and 83,396,765 shares outstanding at September 30, 2020; and 124,626,786 shares issued and 85,342,156 shares outstanding at December 31, 2019
126 124 
Additional paid-in capital2,713,022 2,494,721 
Retained earnings5,207,094 4,712,729 
Accumulated other comprehensive loss(1,583,136)(972,465)
Less treasury stock, 42,600,539 shares at September 30, 2020 and 39,284,630 shares at December 31, 2019
(3,399,356)(2,523,493)
Total stockholders’ equity2,937,750 3,711,616 
Total liabilities and stockholders’ equity$11,093,999 $12,248,541 

See accompanying notes to unaudited consolidated financial statements.

1

Table of Contents

FLEETCOR Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income
(In Thousands, Except Per Share Amounts)
 
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2020201920202019
Revenues, net$585,283 $681,048 $1,771,522 $1,949,967 
Expenses:
Processing119,856 135,016 474,849 384,588 
Selling46,762 51,790 144,995 152,907 
General and administrative90,868 98,050 283,717 297,618 
Depreciation and amortization63,479 67,347 190,117 205,700 
Other operating, net(214)(296)(482)(1,480)
Operating income264,532 329,141 678,326 910,634 
Investment loss (gain)1,330  (30,008)15,660 
Other (income) expense, net(3,591)(120)(10,477)628 
Interest expense, net31,383 36,504 99,474 115,088 
Total other expense 29,122 36,384 58,989 131,376 
Income before income taxes235,410 292,757 619,337 779,258 
Provision for income taxes46,593 66,952 124,972 119,695 
Net income$188,817 $225,805 $494,365 $659,563 
Basic earnings per share$2.26 $2.61 $5.87 $7.64 
Diluted earnings per share$2.19 $2.49 $5.68 $7.33 
Weighted average shares outstanding:
Basic shares83,719 86,662 84,170 86,332 
Diluted shares86,273 90,522 87,006 89,976 

See accompanying notes to unaudited consolidated financial statements.


2

Table of Contents

FLEETCOR Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Comprehensive Income (Loss)
(In Thousands)
 
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2020201920202019
Net income$188,817 $225,805 $494,365 $659,563 
Other comprehensive loss:
Foreign currency translation losses, net of tax(10,328)(180,317)(577,189)(148,282)
Net change in derivative contracts, net of tax9,167 (6,164)(33,482)(52,538)
Total other comprehensive loss(1,161)(186,481)(610,671)(200,820)
Total comprehensive income (loss)$187,656 $39,324 $(116,306)$458,743 
See accompanying notes to unaudited consolidated financial statements.

3

Table of Contents

FLEETCOR Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Stockholders’ Equity
(In Thousands)
 
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Total
Balance at December 31, 2019$124 $2,494,721 $4,712,729 $(972,465)$(2,523,493)$3,711,616 
Net income— — 147,060 — — 147,060 
Other comprehensive loss, net of tax— — — (619,659)— (619,659)
Acquisition of common stock— 75,000 — — (605,237)(530,237)
Share-based compensation — 14,175 — — — 14,175 
Issuance of common stock1 73,273 — — — 73,274 
Balance at March 31, 2020125 2,657,169 4,859,789 (1,592,124)(3,128,730)2,796,229 
Net income— — 158,488 — — 158,488 
Other comprehensive income, net of tax— — — 10,149 — 10,149 
Acquisition of common stock— — — — (32,230)(32,230)
Share-based compensation— 8,989 — — — 8,989 
Issuance of common stock1 24,808 — — — 24,809 
Balance at June 30, 2020126 2,690,966 5,018,277 (1,581,975)(3,160,960)2,966,434 
Net income— — 188,817 — — 188,817 
Other comprehensive loss, net of tax— — — (1,161)— (1,161)
Acquisition of common stock— — — — (238,396)(238,396)
Share-based compensation— 11,905 — — — 11,905 
Issuance of common stock— 10,151 — — — 10,151 
Balance at September 30, 2020$126 $2,713,022 $5,207,094 $(1,583,136)$(3,399,356)$2,937,750 

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Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Total
Balance at December 31, 2018$123 $2,306,843 $3,817,656 $(913,858)$(1,870,584)$3,340,180 
Net income— — 172,107 — — 172,107 
Other comprehensive loss, net of tax— — — (20,334)— (20,334)
Acquisition of common stock— 33,000 — — (36,322)(3,322)
Share-based compensation — 12,541 — — — 12,541 
Issuance of common stock— 29,795 — — — 29,795 
Balance at March 31, 2019123 2,382,179 3,989,763 (934,192)(1,906,906)3,530,967 
Net income— — 261,651 — — 261,651 
Other comprehensive income, net of tax — — — 5,995 — 5,995 
Acquisition of common stock— — — — (702)(702)
Share-based compensation — 18,306 — — — 18,306 
Issuance of common stock— 27,155 — — — 27,155 
Balance at June 30, 2019$123 $2,427,640 $4,251,414 $(928,197)$(1,907,608)$3,843,372 
Net income— — 225,805 — — 225,805 
Other comprehensive loss, net of tax — — — (186,481)— (186,481)
Acquisition of common stock— — — — (58,336)(58,336)
Share-based compensation — 15,273 — — — 15,273 
Issuance of common stock— 60,677 — — — 60,677 
Balance at September 30, 2019$123 $2,503,590 $4,477,219 $(1,114,678)$(1,965,944)$3,900,310 

See accompanying notes to unaudited consolidated financial statements.

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FLEETCOR Technologies, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(In Thousands)
 Nine Months Ended
September 30,
 20202019
Operating activities
Net income$494,365 $659,563 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation48,150 46,393 
Stock-based compensation35,069 46,120 
Provision for losses on accounts and other receivables152,485 54,735 
Amortization of deferred financing costs and discounts5,028 3,741 
Amortization of intangible assets and premium on receivables141,967 159,307 
Deferred income taxes(5,747)11,142 
Investment (gain) loss(30,008)15,660 
Other non-cash operating income(482)(1,778)
Changes in operating assets and liabilities (net of acquisitions/dispositions):
Accounts and other receivables49,690 (472,378)
Prepaid expenses and other current assets26,105 (77,836)
Other assets6,129 (26,578)
Accounts payable, accrued expenses and customer deposits291,945 373,044 
Net cash provided by operating activities1,214,696 791,135 
Investing activities
Acquisitions, net of cash acquired(72,557)(334,860)
Purchases of property and equipment(55,019)(48,681)
Proceeds from disposal of investment
52,963  
Net cash used in investing activities(74,613)(383,541)
Financing activities
Proceeds from issuance of common stock95,780 117,627 
Repurchase of common stock(788,409)(59,362)
(Payments) borrowings on securitization facility, net(282,973)106,000 
Deferred financing costs paid and debt discount(2,474)(2,421)
Proceeds from issuance of notes payable 700,000 
Principal payments on notes payable(134,097)(97,313)
Borrowings from revolver 1,198,500 965,709 
Payments on revolver (1,287,899)(1,992,296)
(Payments) borrowings on swing line of credit, net(20,111)1,775 
Other(244)(189)
Net cash used in financing activities(1,221,927)(260,470)
Effect of foreign currency exchange rates on cash(222,533)(46,140)
Net (decrease) increase in cash and cash equivalents and restricted cash(304,377)100,984 
Cash and cash equivalents and restricted cash, beginning of period1,675,237 1,364,893 
Cash and cash equivalents and restricted cash, end of period$1,370,860 $1,465,877 
Supplemental cash flow information
Cash paid for interest$98,564 $136,850 
Cash paid for income taxes$119,089 $148,727 

See accompanying notes to unaudited consolidated financial statements.

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FLEETCOR Technologies, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
September 30, 2020
1. Summary of Significant Accounting Policies
Basis of Presentation
Throughout this Current Report on Form 10-Q, the terms “our,” “we,” “us,” and the “Company” refers to FLEETCOR Technologies, Inc. and its subsidiaries. The Company prepared the accompanying unaudited interim consolidated financial statements in accordance with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States (“GAAP”). The unaudited interim consolidated financial statements reflect all adjustments considered necessary for fair presentation. These adjustments consist of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. Actual results may differ from these estimates.
The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. These financial statements were prepared using information reasonably available as of September 30, 2020 and through the date of this Report. The accounting estimates used in the preparation of the Company’s consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from these estimates due to the uncertainty around the magnitude and duration of the COVID-19 pandemic, as well as other factors.
Foreign Currency Translation        
Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at the rates of exchange in effect at period-end. The related translation adjustments are recorded to accumulated other comprehensive income (loss). Income and expenses are translated at the average monthly rates of exchange in effect during the period. Gains and losses from foreign currency transactions are included in net income.
The Company recognized the following foreign exchange gains/losses on long-term intra-entity transactions, net of tax, and foreign exchange gains/losses within the Unaudited Consolidated Statements of Comprehensive Income (Loss) as follows (in millions):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Long-term intra-entity gain (loss)$50.4 $(48.4)235.8 (81.7)
Foreign exchange gain 3.7 0.1 3.2 0.3 
Derivatives
The Company uses derivatives to minimize its exposures related to changes in interest rates and to facilitate cross-currency corporate payments by writing derivatives to foreign currency payment customers.
The Company is exposed to the risk of changing interest rates because its borrowings are subject to variable interest rates. In order to mitigate this risk, the Company utilizes derivative instruments. Interest rate swap contracts designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company hedges a portion of its variable rate debt utilizing derivatives designated as cash flow hedges.
Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in other assets or other noncurrent liabilities and offset against accumulated other comprehensive income/loss, net of tax. Derivative fair value changes that are recorded in accumulated other comprehensive income/loss are reclassified to earnings in the same period or periods that the hedged item affects earnings, to the extent the derivative is effective in offsetting the change in cash flows attributable to the
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hedged risk. The portions of the change in fair value that are either considered ineffective or are excluded from the measure of effectiveness are recognized immediately within earnings.
In the Company's cross-border payments business, the Company writes foreign currency forward and option contracts for its customers to facilitate future payments. The duration of these derivative contracts at inception is generally less than one year. The Company aggregates its foreign exchange exposures arising from customer contracts, including forwards, options and spot exchanges of currency, as necessary, and economically hedges the net currency risks by entering into offsetting derivatives with established financial institution counterparties. The gain or loss on changes in the fair value of these derivatives are recorded in revenues, net in the Unaudited Consolidated Statements of Income.
The Company recognizes all derivative assets, net in prepaid expense and other current assets and all derivative liabilities, net in other current liabilities, after netting at the customer level, as right of offset exists, in its Unaudited Consolidated Balance Sheets at their fair value. All cash flows associated with derivatives are included in cash flows from operating activities in the Consolidated Statements of Cash Flows. Refer to Note 13.
Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less. Restricted cash represents customer deposits repayable on demand.
Financial Instruments-Credit Losses
The Company adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", on January 1, 2020, under which the Current Expected Credit Loss methodology for measurement of credit losses on financial assets measured at amortized cost basis, replaces the previous incurred loss impairment methodology. The Company’s financial assets subject to credit losses are primarily trade receivables. The Company utilizes a combination of aging and loss-rate methods to develop an estimate of current expected credit losses, depending on the nature and risk profile of the underlying asset pool, based on product, size of customer and historical losses. Expected credit losses are estimated based upon an assessment of risk characteristics, historical payment experience, and the age of outstanding receivables, adjusted for forward-looking economic conditions. The allowances for remaining financial assets measured at amortized cost basis are evaluated based on underlying financial condition, credit history, and current and forecast economic conditions. The estimation process for expected credit losses includes consideration of qualitative and quantitative risk factors associated with the age of asset balances, expected timing of payment, contract terms and conditions, changes in specific customer risk profiles or mix of customers, geographic risk, economic trends and relevant environmental factors.
Revenue
The Company provides payment solutions to our business, merchant, consumer and payment network customers. Our payment solutions are primarily focused on specific spend categories, including fuel, lodging, tolls, and general corporate payments, as well as gift card solutions (stored value cards and e-cards). The Company provides products that help businesses of all sizes control, simplify and secure payment of various domestic and cross-border payables using specialized payment products. The Company also provides other payment solutions for fleet maintenance, employee benefits and long haul transportation-related services. Revenues from contracts with customers, within the scope of ASC 606, represent approximately 80% of total consolidated revenues, net, for the three and nine months ended September 30, 2020. The Company accounts for remaining revenues comprised of late fees and finance charges, in jurisdictions where permitted under local regulations, primarily in the U.S. and Canada in accordance with ASC 310, "Receivables". Such fees are recognized net of a provision for estimated uncollectible amounts, at the time the fees and finance charges are assessed and services are provided. The Company also writes foreign currency forward and options contracts for its customers to facilitate future payments in foreign currencies, and recognizes revenue in accordance with authoritative fair value and derivatives accounting (ASC 815, "Derivatives").
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Disaggregation of Revenues
The Company provides its services to customers across different payment solutions and geographies. Revenue by product (in millions) for the three and nine months ended September 30 was as follows:
Revenues, net by Product*1
Three Months Ended September 30,Nine Months Ended September 30,
2020%2019%2020%2019%
Fuel$255 44 %$296 43 %797 45 %874 45 %
Corporate Payments107 18 %120 18 %319 18 %329 17 %
Tolls 68 12 %89 13 %215 12 %264 14 %
Lodging53 9 %56 8 %150 8 %148 8 %
Gift39 7 %48 7 %108 6 %133 7 %
Other64 11 %72 11 %182 10 %203 10 %
Consolidated revenues, net$585 100 %$681 100 %1,772 100 %1,950 100 %

1 Reflects certain reclassifications of revenue between product categories as the Company realigned its Corporate Payments business, resulting in reclassification of payroll paycard revenue from Corporate Payments to Other.
*Columns may not calculate due to rounding.

Revenue by geography (in millions) for the three and nine months ended September 30 was as follows:
Revenues, net by Geography*Three Months Ended September 30,Nine Months Ended September 30,
2020%2019%2020%2019%
United States$357 61 %$414 61 %1,090 62 %1,174 60 %
Brazil80 14 %106 16 %254 14 %316 16 %
United Kingdom70 12 %68 10 %193 11 %205 10 %
Other78 13 %93 14 %235 13 %256 13 %
Consolidated revenues, net585 100 %681 100 %1,772 100 %1,950 100 %

*Columns may not calculate due to rounding.
Contract Liabilities
Deferred revenue contract liabilities for customers subject to ASC 606 were $53.7 million and $71.8 million as of September 30, 2020 and December 31, 2019, respectively. We expect to recognize approximately $33.3 million and $42.6 million of these amounts in revenues within 12 months and the remaining $20.4 million and $29.2 million over the next five years as of September 30, 2020 and December 31, 2019, respectively. Revenue recognized in the nine months ended September 30, 2020 that was included in the deferred revenue contract liability as of December 31, 2019 was approximately $34.0 million.
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Spot Trade Offsetting
The Company uses spot trades to facilitate cross-currency corporate payments in its Cambridge business. Timing in the receipt of cash from customers results in intermediary balances in the receivable from the customers and the payment to the customers' counterparty. In accordance with ASC Subtopic 210-20, "Offsetting," the Company applies offsetting to spot trade assets and liabilities associated with contracts that include master netting agreements, as a right of setoff exists, which the Company believes to be enforceable. As such, the Company has netted the Company's exposure with these customers' counterparties, with the receivables from the customers. The Company recognizes all spot trade assets, net in accounts receivable and all spot trade liabilities, net in accounts payable, each net at the customer level, in its Consolidated Balance Sheets at their fair value. The following table presents the Company’s spot trade assets and liabilities at their fair value at September 30, 2020 and December 31, 2019, (in millions). 
September 30, 2020December 31, 2019
Gross Offset on the Balance SheetNet GrossOffset on the Balance SheetNet
Assets
Accounts Receivable$1,461.7 $(1,421.8)$39.9 $1,139.1 $(1,084.6)$54.5 
Liabilities
Accounts Payable$1,455.1 $(1,421.8)$33.3 $1,140.4 $(1,084.6)$55.8 

Adoption of New Accounting Standards
Cloud Computing Arrangements
On August 29, 2018, the FASB issued ASU 2018-15, "Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract", that provides guidance on implementation costs incurred in a cloud computing arrangement (CCA) that is a service contract. The ASU, which was released in response to a consensus reached by the EITF at its June 2018 meeting, aligns the accounting for such costs with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, the ASU amends ASC 350 to include in its scope implementation costs of a CCA that is a service contract and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized in such a CCA. The Company adopted this guidance on January 1, 2020, which did not have a material impact on the Company's results of operations, financial condition, or cash flows.
Fair Value Measurement
On August 28, 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement", which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC 820. The guidance is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The guidance on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other guidance should be applied retrospectively to all periods presented upon their effective date. The Company adopted this guidance on January 1, 2020, which did not have a material impact on the Company's results of operations, financial condition, or cash flows.
Credit Losses on Financial Instruments
In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", which changes how companies measure and recognize credit impairment for many financial assets. The new expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets (including trade receivables) that are in the scope of the update. The update also made amendments to the current impairment model for held-to-maturity and available-for-sale debt securities and certain guarantees. The Company adopted this guidance on January 1, 2020, which did not have a material impact on the Company's results of operations, financial condition, or cash flows. The Company has made updates to its policies and internal controls over financial reporting as a result of the adoption.
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In April 2019, the FASB issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments", which clarifies certain aspects of accounting for credit losses, hedging activities, and financial instruments. For clarifications around credit losses, the effective date will be the same as the effective date in ASU 2016-13. For entities that have adopted ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", ASU 2019-04 is effective the first annual reporting period beginning after the date of issuance of ASU 2019-04 and may be early adopted. The Company adopted this guidance on January 1, 2020, which did not have a material impact on the Company's results of operations, financial condition, or cash flows. The Company has made updates to its policies and internal controls over financial reporting as a result of the adoption.

Pending Adoption of Recently Issued Accounting Standard
Income Taxes
On December 18, 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which removes certain exceptions to the general principles of ASC 740 and simplifies other areas in order to simplify its application. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption permitted. The Company's adoption of this ASU is not expected to have a material impact on the results of operations, financial condition, or cash flows.
Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) ("ASU 2020-04"), which provides optional expedients and exceptions to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference London Inter-bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022 for which an entity has elected certain optional expedients and are retained through the end of the hedging relationship. The amendments in this update also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. If elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions within the relevant ASC Topic or Industry Subtopic that contains the guidance that otherwise would be required to be applied. The amendments in this update were effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is evaluating the effect of ASU 2020-04 on its consolidated financial statements.
2. Accounts and Other Receivables
The Company's accounts and other receivables and securitized accounts receivable include the following at September 30, 2020 and December 31, 2019 (in thousands):
September 30, 2020December 31, 2019
Gross domestic accounts receivable$847,080 $734,410 
Gross domestic securitized accounts receivable688,000 970,973 
Gross foreign receivables789,497 905,441 
Total gross receivables2,324,577 2,610,824 
Less allowance for credit losses(83,882)(70,890)
Net accounts and other receivables and securitized accounts receivable$2,240,695 $2,539,934 
The Company maintains a $1.0 billion revolving trade accounts receivable securitization facility (the "Securitization Facility"). Accounts receivable collateralized within our Securitization Facility relate to our U.S. trade receivables resulting from charge card activity. Pursuant to the terms of the Securitization Facility, the Company transfers certain of its domestic receivables, on a revolving basis, to FLEETCOR Funding LLC ("Funding") a wholly-owned bankruptcy remote subsidiary. In turn, Funding transfers, without recourse, on a revolving basis, up to $1.0 billion of undivided ownership interests in this pool of accounts receivable to banks and a multi-seller, asset-backed commercial paper conduit ("Conduit"). Funding maintains a subordinated interest, in the form of over-collateralization, in a portion of the receivables sold to the banks and Conduit. Purchases by the Conduit are financed with the sale of highly-rated commercial paper.
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The Company utilizes proceeds from the transferred assets as an alternative to other forms of financing to reduce its overall borrowing costs. The Company has agreed to continue servicing the sold receivables for the financial institution at market rates, which approximates the Company’s cost of servicing. The Company retains a residual interest in the securitized accounts receivable sold as a form of credit enhancement. The residual interest’s fair value approximates carrying value due to its short-term nature. Funding determines the level of funding achieved by the sale of trade accounts receivable, subject to a maximum amount.
The Company’s Consolidated Balance Sheets and Statements of Income reflect the activity related to securitized accounts receivable and the corresponding securitized debt, including interest income, fees generated from late payments, provision for losses on accounts receivable and interest expense. The cash flows from borrowings and repayments, associated with the securitized debt, are presented as cash flows from financing activities. The maturity date for the Company's Securitization Facility is November 14, 2020. On August 21, 2020, the Company signed a commitment letter to enter into an amendment to the Securitization Facility, effective on November 13, 2020, which will, among other things, extend the term to November 12, 2021, unless further extended.
The Company recorded a $90.1 million provision for credit losses and write-off related to a customer receivable in our foreign currency trading business during the nine months ended September 30, 2020. The Company's estimated expected credit losses as of September 30, 2020, included estimated adjustments for economic conditions related to COVID-19. A rollforward of the Company’s allowance for credit losses related to accounts receivable for the nine months ended September 30 is as follows (in thousands):
20202019
Allowance for credit losses beginning of period$70,890 $59,963 
Provision for credit losses152,485 54,735 
Write-offs(138,939)(51,273)
Recoveries7,861 3,297 
Impact of foreign currency(8,415)(2,057)
Allowance for credit losses end of period$83,882 $64,665 

3. Fair Value Measurements
Fair value is a market-based measurement that reflects assumptions that market participants would use in pricing an asset or liability. GAAP discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions.
As the basis for evaluating such inputs, a three-tier value hierarchy prioritizes the inputs used in measuring fair value as follows:
 
Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.
Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
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The following table presents the Company’s financial assets and liabilities which are measured at fair value on a recurring basis at September 30, 2020 and December 31, 2019, (in thousands). 
Fair ValueLevel 1Level 2Level 3
September 30, 2020
Assets:
Repurchase agreements$312,939 $ $312,939 $ 
Money market46,846  46,846  
Certificates of deposit172  172  
       Foreign exchange derivative contracts 97,799  97,799  
Total assets$457,756 $ $457,756 $ 
Cash collateral for foreign exchange derivative contracts$18,984 $ $ $ 
Liabilities:
Interest rate swaps $100,722 $ $100,722 
       Foreign exchange derivative contracts 79,141  79,141  
Total liabilities$179,863 $ $179,863 $ 
Cash collateral obligation for foreign exchange derivative contracts$24,234 $ $ $ 
 
December 31, 2019
Assets:
Repurchase agreements$833,658 $ $