Depreciation and amortization - The Company has ~~elected to prospectively classify these excess tax benefits as cash flows from operating activities effective January 1, 2017. The Company will continue to estimate~~identified those tangible and intangible assets directly associated with providing a service that generates revenue and records the ~~number of awards expected to vest, rather than electing to account for forfeitures as they occur. Adoption of~~depreciation and amortization associated with those assets under this ~~standard has not impacted the Company's minimum statutory tax withholding practices.~~

In May 2017, the FASB issued ASU 2017-09, which clarifies when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. Under the new guidance, an entity will not apply modification accounting to a share-based payment award if there is no change to the award’s fair value, vesting conditions and classification as an equity or liability instrument. The guidance is effective prospectively for all companies for annual periods beginning on or after December 15, 2017. The Company elected to early adopt this ASU and such adoption has not impacted the Company's consolidated financial statementscategory. Such assets include processing platforms and related ~~disclosures.~~

~~Not Yet Adopted~~

In May 2014, the FASB issued ASU 2014-09 ("Topic 606"), which will supersede most existing revenue recognition guidance under GAAP. The new revenue recognition standard requires entities to recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timinginfrastructure, acquired developed technology intangible assets, and ~~uncertainty of revenue and cash flows arising from contracts with customers.~~other similar asset types.

The Company will adopt this standard on January 1, 2018. The guidance permits two methods of adoption: full retrospective approach, which requires an entity to restate each prior period that is reported in the financial statements and modified retrospective approach, which requires a cumulative adjustment to retained earnings as of the effective date, without restatement of prior period amounts. The Company will adopt the standard using the modified retrospective method.

1011

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

~~(in thousands, except per share data)~~(unaudited)

~~(unaudited)~~

Other Operating Expenses

General and administrative - General and administrative includes compensation and related expenses for the executive, finance and accounting, other information technology, human resources, legal and other corporate functions. Also included are corporate facilities expenses, certain third-party professional service fees and other corporate expenses.

Sales and marketing - The Company’s sales and marketing expenses relate primarily to compensation, benefits, sales commissions and related expenses for sales, marketing and other related activities. With the adoption of Topic 606 effective January 1, 2018, certain payments to partners are now classified as sales and marketing expenses.

Depreciation and amortization - The depreciation and amortization associated with tangible and intangible assets that are not considered to be directly associated with providing a service that generates revenue are recorded as other operating expenses. Such assets include corporate facilities and information technology assets and acquired intangible assets other than those included in cost of services.

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(unaudited)



2.	Recent Accounting Pronouncements

The following table provides a brief description of accounting pronouncements adopted during the six months ended June 30, 2018 and recent accounting pronouncements that could have a material effect on our financial statements:



Standard	Description	Date/Method of Adoption	Effect on financial statements or other significant matters
Adopted During the Six Months Ended June 30, 2018
ASU 2014–09	This standard supersedes most existing revenue recognition guidance under GAAP. The new revenue recognition standard requires entities to recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.	The Company adopted this standard on January 1, 2018 using the modified retrospective approach to those contracts that were not completed as of January 1, 2018. Adoption resulted in a cumulative adjustment to retained earnings as of the effective date, without restatement of prior period amounts.	The Company’s revenue from discount and interchange, transaction processing and certain fees is within the scope of Topic 606. FASB and its Transition Resource Group have issued clarifications on various aspects of ASU 2014–09. There were three primary impacts to the Company resulting from the adoption of Topic 606, which are described below. Certain amounts paid to partners in our Fleet Solutions and Travel and Corporate Solutions segments have been determined to fall under the “cost to obtain a contract” guidance. As a result, these amounts, which were previously presented as a reduction of revenues, are now reflected within sales and marketing on our unaudited condensed consolidated statements of income. This change increased both reported revenues and expenses for the three and six months ended June 30, 2018 by approximately $16.2 million and $31.1 million, respectively. Network fees paid by all three of our segments, but primarily by our Travel and Corporate Solutions segment, are now presented as a reduction of revenues in our unaudited condensed consolidated statements of income. Prior to January 1, 2018, these amounts were included within service fees. This change reduced both reported revenues and expenses by approximately $4.4 million and $10.0 million for the three and six months ended June 30, 2018, respectively. Certain costs to obtain a contract, such as sales commissions, are to be capitalized and amortized over the life of the customer relationship, with a practical expedient available for contracts under one year in duration. The vast majority of the Company’s commissions will continue to be expensed as incurred. This change resulted in an immaterial impact to operating income for the three and six months ended June 30, 2018. As of January 1, 2018, we recorded $0.6 million cumulative-effect adjustment, net of the associated tax effect, related to the deferral of capitalizable costs to obtain a contract within our Health and Employee Benefit Solutions segment. These commissions are amortized to sales and marketing expense over a useful life that considers the contract term, our commission policy, renewal experience and the transfer of services to which the asset relates.

ASU 2017–07	This standard changes the presentation of net benefit pension costs by requiring the disaggregation of certain of its components. Under the guidance, companies are required to present the service cost component in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The other components of net benefit cost will be presented in the income statement separately from the service cost component and outside the subtotal of operating income, if one is presented. Additionally, only the service cost component will be eligible for capitalization under the new guidance.	The Company adopted ASU 2017–07 effective January 1, 2018.	The adoption did not have a material impact on our results of operations, cash flows or consolidated financial position.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)



ASU 2016–18	This standard clarifies the classification and presentation of restricted cash in the statement of cash flows. Upon adoption, the statement of cash flows must explain the change during the period in the total of cash and cash equivalents and amounts described as restricted cash or cash equivalents.	The Company retrospectively adopted ASU 2016–18 effective January 1, 2018.	This retrospective adoption resulted in including restricted cash in cash, cash equivalents and restricted cash when reconciling the beginning of year and end of year amounts presented on the unaudited condensed consolidated statements of cash flows. A reconciliation of cash, cash equivalents and restricted cash as reported within our unaudited condensed consolidated balance sheets is included within our unaudited condensed consolidated statements of cash flows.

ASU 2016–01	This standard requires equity investments, except those accounted for under the equity method of accounting, or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income.	The Company adopted ASU 2016–01 effective January 1, 2018.	Changes in the fair value of investment securities are now reflected as non-operating income within our unaudited condensed consolidated statements of income. The adoption did not have a material impact on our results of operations, balance sheet or cash flows.
Not Yet Adopted as of June 30, 2018
ASU 2016–02 Leases (Topic 842)	This standard increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Certain qualitative and quantitative disclosures are required.	The standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period using modified retrospective adoption.	The Company has established an ASU 2016–02 committee whose primary objectives include evaluating potential software solutions, reviewing and summarizing lease contracts, establishing completeness over the lease population, determining which practical expedients, if any, we will utilize to facilitate compliance and updating the Company’s accounting policies and procedures. We expect to recognize right-of-use assets and corresponding lease liabilities on the Company’s consolidated balance sheet following the adoption of ASU 2016–02, but the Company is not able to quantify the impact of adoption at this time. We are also evaluating the impact the standard will have on our consolidated statement of operations, consolidated statement of cash flows and related disclosures

ASU 2016–13 Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	This standard requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses will be based on historical experience, current conditions, and reasonable and supportable forecasts that impact the collectability of the reported amount.	The standard is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years.	The Company is evaluating the impact the standard will have on its consolidated financial statements and related disclosures.

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(unaudited)



3.	Revenue

The Company adopted Topic 606 on January 1, 2018, utilizing the modified retrospective method. See Note 2, Recent Accounting Pronouncements, for further information regarding the adoption impact. Under the modified retrospective method, prior period comparable financial information continues to be presented under the guidance of ASC 605, Revenue Recognition. Please see the Company’s Annual Report on Form 10–K for the year ended December 31, 2017 for our accounting policies applied to revenue recognition prior to adoption of Topic 606.

The impact of adopting Topic 606 for the three and six months ended June 30, 2018 was as follows:



	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
(In thousands)	Prior to Adoption			Impact of Topic 606			As Reported			Prior to Adoption			Impact of Topic 606			As Reported
Revenues
Payment processing revenue	$	167,874		$	10,864		$	178,738		$	327,504		$	19,688		$	347,192
Account servicing revenue	78,716			—			78,716			157,420			—			157,420
Finance fee revenue	51,573			—			51,573			101,255			—			101,255
Other revenue	60,822			1,027			61,849			118,315			1,523			119,838
Total revenues	358,985			11,891			370,876			704,494			21,211			725,705
Cost of services
Processing costs	76,306			—			76,306			155,928			—			155,928
Service fees	18,181			(4,372		)	13,809			36,076			(10,047		)	26,029
Provision for credit losses	11,505			—			11,505			25,495			—			25,495
Operating interest	9,528			—			9,528			18,013			—			18,013
Depreciation and amortization	20,612			—			20,612			41,045			—			41,045
Total cost of services	136,132			(4,372		)	131,760			276,557			(10,047		)	266,510
General and administrative	48,488			—			48,488			103,921			—			103,921
Sales and marketing	41,505			16,192			57,697			83,150			31,088			114,238
Depreciation and amortization	30,020			—			30,020			59,763			—			59,763
Operating income	102,840			71			102,911			181,103			170			181,273
Financing interest expense	(25,505		)	—			(25,505		)	(52,842		)	—			(52,842		)
Net foreign currency loss	(26,734		)	—			(26,734		)	(26,344		)	—			(26,344		)
Net unrealized gain on financial instruments	2,706			—			2,706			16,214			—			16,214
Income before income taxes	53,307			71			53,378			118,131			170			118,301
Income taxes	13,919			19			13,938			29,485			42			29,527
Net income	39,388			52			39,440			88,646			128			88,774
Less: Net income (loss) from non-controlling interest	142			—			142			843			—			843
Net income attributable to shareholders	$	39,246		$	52		$	39,298		$	87,803		$	128		$	87,931

Topic 606 does not apply to rights or obligations associated with financial instruments, ~~(e.g. interest income),~~ including the Company’s finance fee and interest income from banking relationships and ~~cardholders. In addition,~~cardholders, certain other fees associated with cardholder arrangements ~~are outside~~and commissions paid related to such agreements, which continue to be within the scope of ASC Topic ~~606. As a result of further internal analysis, management now estimates approximately 25 percent of consolidated revenues for the period ended December 31, 2016 are outside the scope of~~ 310, Receivables (“Topic ~~606.~~310”).

The vast majority of the Company’s Topic 606 revenue is derived from ~~discount and interchange,~~stand-ready obligations to provide payment processing, transaction processing and SaaS services and support. Revenue is recognized based on the value of services transferred to date using a time elapsed output method. For payment processing and transaction processing, services are considered to be transferred when a transaction is captured and the Company has validated that the transaction has no errors. Point-in-time revenue recognized during the three and six months ended June 30, 2018 was not material.

We disaggregate our revenue from contracts with customers by service-type for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following tables disaggregate our consolidated revenue for the three and six months ended June 30, 2018:



	Three Months Ended June 30, 2018
(In thousands)	Fleet Solutions		Travel and Corporate Solutions		Health and Employee Benefit Solutions		Total
Topic 606 revenues
Payment processing revenue	$	112,895	$	51,289	$	14,554	$	178,738
Account servicing revenue	5,384		8,995		26,702		41,081
Other revenue	10,525		1,206		5,274		17,005
Total Topic 606 revenues	$	128,804	$	61,490	$	46,530	$	236,824

Topic 310 revenues
Account servicing revenue	$	37,635	—		—		$	37,635
Finance fee revenue	45,188		228		6,157		51,573
Other revenue	29,843		14,046		955		44,844
Total Topic 310 revenues	$	112,666	$	14,274	$	7,112	$	134,052

Total revenues	$	241,470	$	75,764	$	53,642	$	370,876



	Six Months Ended June 30, 2018
(In thousands)	Fleet Solutions		Travel and Corporate Solutions		Health and Employee Benefit Solutions		Total
Topic 606 revenues
Payment processing revenue	$	219,873	$	96,066	$	31,253	$	347,192
Account servicing revenue	13,850		18,464		53,727		86,041
Other revenue	27,567		2,323		13,416		43,306
Total Topic 606 revenues	$	261,290	$	116,853	$	98,396	$	476,539

Topic 310 revenues
Account servicing revenue	$	71,379	—		—		$	71,379
Finance fee revenue	88,792		487		11,976		101,255
Other revenue	50,374		25,203		955		76,532
Total Topic 310 revenues	$	210,545	$	25,690	$	12,931	$	249,166

Total revenues	$	471,835	$	142,543	$	111,327	$	725,705

Payment Processing Revenue

Payment processing revenue consists primarily of interchange income. Interchange income is a fee paid by a merchant bank (“merchant”) to the card-issuing bank (generally the Company) in exchange for the Company facilitating and processing transactions with cardholders. Interchange fees are set by the card network. WEX processes transactions through both closed-loop and open-loop networks.

Our Fleet Solutions segment interchange income primarily relates to revenue earned on transactions processed through the Company’s proprietary closed-loop fuel networks. In closed-loop fuel network arrangements, written contracts are entered into between the Company and merchants, which determine the interchange fee charged on transactions. The Company extends short-term credit to the fleet cardholder and pays the merchant the purchase price for the cardholder’s transaction, less the interchange fees the Company retains. The Company collects the total purchase price from the fleet cardholder. In Europe, interchange income is specifically derived from the difference between the negotiated price of fuel from the supplier and the agreed upon price paid by fleet cardholders.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Interchange income in our Travel and Corporate Solutions and Health and Employee Benefit Solutions segments relates to revenue earned on transactions processed through open-loop networks. In open-loop network arrangements, there are several intermediaries involved between the merchant and the cardholder and written contracts between all parties involved in the process do not exist. Rather, the transaction is governed by the rates determined by the payment network at the point-of-sale. This framework dictates the interchange rate, the risk of loss, dispute procedures and timing of payment. For these transactions, there is an implied contract between the Company and the merchant. In our Travel and Corporate Solutions segment, the Company remits payment to the card network for the purchase price of the cardholder transaction, less the interchange fees the Company earns. The Company collects the total purchase price from the cardholder. In our Health and Employee Benefit Solutions segment, funding of transactions and collections from cardholders is performed by third-party sponsor banks, who remit a portion of the interchange fee to us.

The Company has determined that the merchant is the customer as it relates to interchange income regardless of the type of network through which transactions are processed. The Company’s primary performance obligation to merchants is a stand-ready commitment to provide payment and transaction processing services as the merchant requires, which is satisfied over time in daily increments. Since the timing and quantity of transactions to be processed by us is not determinable, the total consideration is determined to be variable consideration. The variable consideration for our payment and transaction processing service is usage-based and therefore it specifically relates to our efforts to satisfy our obligation. The variability is satisfied each day the service is provided to the customer. We directly ascribe variable fees to the distinct day of service to which it relates, and we consider the services performed each day in order to ascribe the appropriate amount of total fees to that day. Therefore, we measure interchange income on a daily basis based on the services that are performed on that day.

In determining the amount of consideration received related to payment and transaction processing services provided, the Company assessed other intermediaries involved in the processing of transactions, including merchant acquirers, card networks, sponsor banks and third-party payment processors, and assessed whether the Company controls such services performed by other intermediaries according to principal-agent guidance in Topic 606. Based on this assessment, the Company determined that WEX does not control the services performed by merchant acquirers, card networks and sponsor banks as each of these parties is the primary obligor for their portion of payment and transaction processing services performed. Therefore interchange income is recognized net of any fees owed to these intermediaries. The Company determined that services performed by third-party payment processors are controlled by WEX as the Company is responsible for directing how the third-party payment processor authorizes and processes transactions on the Company’s behalf. Therefore, such fees paid to third-party payment processors are recorded as service fees within cost of services.

Additionally, the Company enters into contracts with certain large customers or strategic cardholders that provide for fee rebates tied to performance milestones. The Company considered whether such fee rebates constitute consideration payable to a customer or other parties that purchase services from the customer per Topic 606. If so, such fee rebates, which are considered variable consideration, are recorded as a reduction in payment processing revenue in the same period that related interchange income is recognized. For the three and six months ended June 30, 2018, such variable consideration totaled approximately $222.7 million and $421.2 million, respectively. Fee rebates made to certain other partners were determined to be costs to obtain a contract, and are recorded as sales and marketing expenses.

Account Servicing Revenue

In our Fleet Solutions segment, account servicing revenue is primarily comprised of monthly fees charged to cardholders based on the number of vehicles serviced. These fees are primarily in return for providing monthly vehicle data reports and are recognized on a monthly basis as the service is provided.

In our Travel and Corporate Solutions segment, account servicing reflects revenues earned from our AOC acquisition, primarily consisting of licensing fees for use of our accounts receivable and accounts payable SaaS platforms.

In our Health and Employee Benefit Solutions segment, we also recognize account servicing fees for the per-participant per-month fee charged per consumer on our SaaS healthcare technology platform. Customers including health plans, third-party administrators, financial institutions and payroll companies typically enter into three to five year contracts, which contain significant termination penalties.

Our primary performance obligation in our Travel and Corporate Solutions and Health and Employee Benefit Solutions segments is a stand-ready commitment to provide SaaS services and support which is satisfied over time in a series of daily

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

increments. Revenue is recognized based on an output method based using days elapsed to measure progress as the Company transfers control evenly over each monthly subscription period.

Finance Fee Revenue

The Company earns revenue on overdue accounts, which is recognized as revenue at the time the fees are assessed. The finance fee is calculated using the greater of a minimum charge or a stated late fee rate multiplied by the outstanding balance that is subject to a late fee charge. On occasion, these fees are waived to maintain customer goodwill. The established reserve for such waived amounts is estimated and offset against the late fee revenue recognized. The Company engages in factoring, which is the purchase of accounts receivable from a third-party at a discount. The Company also recognizes finance fee revenue earned on the Company’s foreign salary advance product. All finance fees listed above are within the scope of Topic 310 and are recognized at the time of assessment.

Other Revenue

Other revenue includes transaction processing revenue, professional and marketing services and the sales of telematics hardware, all of which is within scope of Topic 606. ~~FASB~~Revenue is recognized when control of the services or hardware is transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those services. In addition, international settlement fees and certain other cardholder fees (e.g. replacement card fees) are included in other revenue. These cardholder fees are within the scope of Topic 310 and are recognized upon completion of the related service.

Contract Balances

The Company’s contract assets consist of upfront payments made to customers under long-term contracts and are recorded upon payment or when due. These payments reduce revenue recognition in future periods, as the resulting asset is amortized against revenue as the Company performs its ~~Transition Resource Group~~obligations under these arrangements.

The Company’s contract liabilities consist of customer payments received before the Company has satisfied the associated performance obligations and upfront payments due to the customer.

The following table provides information about these contract assets and liabilities from contracts with customers. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period.



(In thousands)
Contract balance	Location on the unaudited condensed consolidated balance sheets	June 30, 2018		January 1, 2018
Receivables¹	Accounts receivable, net	$	29,233	$	30,386
Contract assets	Prepaid expenses and other current assets	$	7,341	$	7,053
Contract assets	Other assets	$	48,645	$	49,068
Contract liabilities	Other current liabilities	$	23,481	$	26,592

¹The majority of the Company’s receivables, excluded from the table above, are either due from cardholders, who have ~~issued clarifications~~not been deemed our customer as it relates to interchange income, or from revenues earned outside of the scope of ASC Topic 606.

Impairment losses recognized on ~~various aspects~~our receivables and contract assets were immaterial for the three and six months ended June 30, 2018. In the three and six months ended June 30, 2018, we recognized revenue of ~~ASU 2014-09. Those clarifications, along with~~$2.2 million and $5.3 million related to contract liabilities as of March 31, 2018 and December 31, 2017, respectively.

Remaining Performance Obligations

The Company’s unsatisfied, or partially unsatisfied performance obligations as of June 30, 2018 represent the ~~guidance under~~remaining minimum monthly fees on a portion of contracts across the lines of business and contractually obligated professional services yet to be provided by the Company. It is not indicative of the Company’s future revenue, as it relates to an insignificant portion of the Company’s operations. As allowed by Topic 606, ~~support~~ the ~~conclusion~~Company has elected to exclude from this disclosure the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table includes revenue expected to be recognized in the future related to remaining performance obligations at the end of the reporting period.



(In thousands)	2018		2019		2020		2021		2022		Thereafter		Total
Minimum monthly fees¹	$	30,803	$	52,182	$	32,160	$	16,699	$	7,394	$	683	$	139,921
Professional services²	9,691		4,183		—		—		—		—		13,874
Total remaining performance obligations	$	40,494	$	56,365	$	32,160	$	16,699	$	7,394	$	683	$	153,795

¹The transaction price allocated to the remaining performance obligations represents the minimum monthly fees on certain service contracts, which contain substantive termination penalties that ~~timing and measurement of revenue associated with~~require the ~~Company’s transaction processing services, including discount and interchange~~counterparty to pay the Company for the aggregate remaining minimum monthly fees upon an early termination for convenience.

² Includes software development projects and other ~~transaction processing fees, will not be significantly impacted by~~services sold subsequent to the ~~new standard. Management estimates approximately 70 percent of consolidated revenues for~~core offerings, to which the ~~period ended December 31, 2016 will remain substantially unchanged under the new standard.~~

Under the new guidance certain costs to obtain a contract, such as sales commissions are to be capitalized and amortized over the life of the contract, with a practical expedient available for contracts under one year in duration. Sales commissions expensed were approximately $20,000 for the year ended December 31, 2016. The Company currently anticipates that the treatment of over 90 percent of commission expenses will remain unchanged and will continue to be expensed.

~~The Company~~customer is currently in the process of implementing changes to its accounting policies, business processes and internal controls to support the recognition, measurement and disclosure requirements under the new standard.contractually obligated.



3.4.	Business Acquisition

~~EFS~~AOC

~~On July 1, 2016,~~Effective October 18, 2017, the Company acquired ~~all~~certain assets and assumed certain liabilities of ~~the outstanding membership interests of EFS, a provider of customized payment solutions for fleet and corporate customers with a focus on the large and mid-sized over-the-road fleets.~~AOC, an industry leader in commercial payments technology. The acquisition ~~enabled the Company~~of AOC, a longstanding technology provider for our virtual card product, will broaden our capabilities, increase our pool of employees with payments platform expertise and allow us to ~~expand its customer footprint and to utilize EFS' technology to better serve~~evolve with the needs of ~~all fleet customers.~~our customers and partners through the use of AOC’s payments processing technology platforms.

~~In consideration~~The Company purchased AOC for the acquisition of EFS, the Company issued 4,012 shares of its common stock valued at approximately $355,000 based on the July 1, 2016 closing price of the Company's common stock on the NYSE. This represented approximately 9.4 percent of the Company's outstanding common stock after giving effect to the issuance of the new shares in connection with this acquisition. The cash consideration for the transaction totaled approximately $1,182,000, and$129.8 million, which was funded with ~~amounts received~~cash on hand and through borrowings under the 2016 Credit ~~Agreement described further in Note 7, Financing~~Agreement. The Company records adjustments to the assets acquired and ~~Other Debt. The value of~~liabilities assumed throughout the ~~total cash and stock consideration paid for~~measurement period, which may be up to one year from the acquisition ~~of EFS was approximately $1,444,000, net of $93,000 in cash acquired.~~

date. The Company has obtained information to ~~determine~~assist in determining the fair values of certain assets acquired and liabilities assumed ~~throughout~~since the ~~one year measurement period and recorded adjustments to the assets acquired and liabilities assumed,~~acquisition, resulting primarily in the recording of other intangible assets and ~~goodwill as described below.~~goodwill. Goodwill is calculated as the consideration in excess of net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized, including synergies derived from the acquisition. The goodwill and intangible assets recorded from this business combination were assigned to our Travel and Corporate Solutions segment.

~~The tax structure~~During the second quarter of ~~EFS consists~~2018, the Company assigned $21.6 million of ~~limited liability companies and corporations. The Company’s tax election will allow a step-up in tax basis related~~the purchase price to its 49.5 percent direct ownership in the parent limited liability company. The remaining 50.5 percent ownership in the parent limited liability company is held by another limited liability company, taxed as a corporation,an acquired processing platform that is ~~part~~still under research and development and has not reached technological feasibility. While research and development continues, this asset will not be amortized. Additionally, it will be subjected to impairment testing at least annually, but more frequently if events of circumstances indicate that it is more likely than not that the asset is impaired. This intangible asset will considered indefinite lived until completion or abandonment of the ~~EFS structure and will therefore receive carry over tax basis.~~project. The ~~difference between book~~Company has not finalized the purchase accounting is still reviewing the valuation and tax basis ~~resulting from receiving carry over tax basis has been reflected~~of assets acquired and liabilities assumed in this business combination. Additionally, we are performing procedures to verify the completeness and accuracy of the data used in the ~~financial statements as an investment~~independent valuation for intangible assets identified in ~~partnership deferred tax liability.~~the table below. The ~~Company has determined that approximately $557,000~~preliminary estimates could change significantly upon completion of ~~the~~this evaluation. The goodwill recognized in this business combination will be deductible for income tax purposes.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

~~(in thousands, except per share data)~~(unaudited)

~~(unaudited)~~

The following ~~represents~~is a summary of the ~~components and final~~preliminary allocation of the purchase ~~price:~~price to the assets and liabilities acquired:

As Reported
December 31, 2016
Measurement Period Adjustments
As Reported,
Final
Total consideration, net of cash acquired $ 1,444,235
$ —
$ 1,444,235
Less:
Accounts receivable 162,684
—
162,684
Property and equipment 2,387
1
2,388
Customer relationships (a)(b) 842,700
(1,300 ) 841,400
Developed technologies (a)(c) 32,120
—
32,120
Trademarks and trade names (a)(d) 13,700
—
13,700
Deferred income tax assets 34,992
6,352
41,344
Other assets —
739
739
Accounts payable (153,777 ) 248
(153,529 )
Accrued expenses (128,267 ) 9,361
(118,906 )
Deferred income tax liabilities (91,194 ) 28,071
(63,123 )
Recorded goodwill (a) $ 728,890
$ (43,472 ) $ 685,418



(In thousands)	As Reported December 31, 2017			Measurement Period Adjustments			As Reported, June 30, 2018
Total consideration	$	129,828		$	—		$	129,828
Less:
Cash	15,546			—			15,546
Accounts receivable	4,171			100			4,271
Property and equipment	2,530			(1,329		)	1,201
Customer relationships ^(a)	15,000			200			15,200
Developed technologies ^(b)	24,100			—			24,100
Trademarks and trade names ^(c)	1,460			10			1,470
In-process research and development	—			21,600			21,600
Other liabilities	(685		)	(448		)	(1,133		)
Recorded goodwill	$	67,706		$	(20,133	)	$	47,573

^(a)$1,235,331 in goodwill and other intangible assets recorded from this business combination were allocated to our Fleet Solutions segment; the remaining $337,307 was allocated to our Travel and Corporate Solutions segment.

~~(b)~~Weighted average life – ~~8.1~~9.0 years.

~~(c)~~^(b)Weighted average life – ~~2.0~~3.4 years.

~~(d)~~^(c)Weighted average life – ~~7.7~~4.3 years.

~~At September 30, 2017, estimated amortization expense related to the definite-lived~~^{(a) (b) (c)}The weighted average life of these amortized intangible assets ~~listed above for each of the next five fiscal years and thereafter~~ is ~~as follows:~~5.5 years.

Remaining 2017 $ 21,344
2018 $ 80,987
2019 $ 74,548
2020 $ 68,685
2021 $ 60,654
2022 $ 53,537
Thereafter $ 427,408

The pro forma financial information presented below includes the effects of the EFS acquisition as if it had been consummated on January 1, 2015. These pro forma results have been calculated after applying the Company's accounting policies and adjusting results to reflect the intangible amortization and interest expense associated with the 2016 Credit Agreement used to fundSince the acquisition ~~and related income tax results assuming they were applied and incurred since January 1, 2015. As a result, $11,903 and $18,497 in transaction costs, which are directly attributable to~~date, the acquisition, have been excluded from pro forma results for the three and nine months ended September 30, 2016. The pro forma results of operations do not include any cost savings or other synergies that may result from the acquisition or any estimated integration costs that have been or will be incurred by the Company. Accordingly, the following pro forma information is not necessarily indicative of either the future results of operations or results that would have been achieved if the acquisition had taken place at the beginning of 2015. The operations of ~~EFS~~AOC contributed net revenues of approximately ~~$46,957 and $135,578~~$6.7 million and net loss before taxes of approximately ~~$8,058 and $28,070~~$0.6 million during the year ended December 31, 2017. No pro forma information has been included in these financial statements as the operations of AOC for the ~~three and nine months ended September 30, 2017, respectively,~~period that they were not part of the Company are not material to the ~~Company's unaudited condensed consolidated statements of income.~~

~~Table of Contents~~

~~WEX INC~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(in thousands, except~~Company’s revenues, net income and earnings per ~~share data)~~

~~(unaudited)~~

~~The following represents unaudited pro forma operational results as if the acquisition had occurred January 1, 2015:~~

Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016
Total revenues $ 287,756
$ 799,039
Net earnings attributable to shareholders $ 27,973
$ 48,584
Net income attributable to shareholders per share:
Basic $ 0.65
$ 1.14
Diluted $ 0.65
$ 1.13
share.



4.5.	Accounts Receivable

~~Payment Terms~~

In general, the Company’s trade receivables provide for payment terms of 30 days or less. Receivables not paid within the terms of the ~~customer~~ agreement are generally subject to late fees based upon the outstanding ~~customer~~ receivable balance.

The Company extends revolving credit to certain small ~~fleet customers.~~fleets. These accounts are also subject to late fees, and balances that are not paid in full are subject to interest charges based on the revolving balance. The Company had approximately ~~$11,200~~$18.0 million and ~~$3,400~~$12.2 million in receivables with revolving credit balances as of ~~September~~June 30, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

Concentration of Credit Risk

The receivables portfolio consists of a large group of homogeneous smaller balances ~~from customers~~ across a wide range of industries, which are collectively evaluated for impairment. No one customer ~~constitutes more than~~receivable balance represented 10 percent or more of the outstanding receivables balance at ~~September~~June 30, ~~2017. One customer represented 11 percent of the outstanding receivables balance at~~2018 or December 31, ~~2016.~~2017. The following table presents the ~~delinquency status~~outstanding balance of trade accounts receivable that are less than 30 and 60 days past due, in each case, as a percentage of total trade accounts receivable:

September 30,
Delinquency Status 2017 2016
Current–29 days past due 95 % 93 %
Current–59 days past due 97 % 97 %



Delinquency Status	June 30, 2018		December 31, 2017
29 days or less past due	98	%	95	%
59 days or less past due	99	%	97	%

Reserves for Accounts Receivable

Receivables are generally ~~written-off~~written off when they are 150 days past due or upon declaration of bankruptcy byof the customer. The reserve for credit losses is calculated by an analytic model that also takes into account other factors, such as the actual charge-offs for the preceding reporting periods, expected charge-offs and recoveries for the subsequent reporting periods, a review of past due accounts receivable balances, changes in ~~customer~~ payment patterns, known fraudulent activity in the portfolio, as well as leading economic and market indicators.

~~The following table presents changes in reserves for accounts receivable:~~

Nine Months Ended September 30,

2017 2016
Balance, beginning of year $ 20,092
$ 13,832
Provision for credit losses 47,927
19,849
Charges to other accounts 12,221
—
Charge-offs (53,044 ) (24,825 )
Recoveries of amounts previously charged-off 5,085
4,980
Currency translation 431
151
Balance, end of period $ 32,712
$ 13,987

1320

Table of Contents

WEX INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

~~(in thousands, except per share data)~~(unaudited)

~~(unaudited)~~

The following table presents changes in the accounts receivable allowances:



	Six Months Ended June 30,
(In thousands)	2018			2017
Balance, beginning of year	$	30,207		$	20,092
Provision for credit losses	25,495			28,313
Charges to other accounts¹	9,556			7,779
Charge-offs	(38,232		)	(33,050		)
Recoveries of amounts previously charged-off	3,505			3,349
Currency translation	(284		)	275
Balance, end of period	$	30,247		$	26,758

¹The Company earns revenue by assessing monthly finance fees on accounts with overdue balances. These fees are recognized as revenue at the time the fees are assessed. The finance fee is calculated using the greater of a minimum charge or a stated late fee rate multiplied by the outstanding balance that is subject to a late fee charge. On occasion, these fees are waived to maintain relationship goodwill. Charges to other accounts represents the offset against the late fee revenue recognized when the Company establishes a reserve for such waived amounts.



5.6.	Earnings per Share

Basic earnings per share is computed by dividing net ~~earnings~~income attributable to shareholders by the weighted average number of shares of common stock and vested deferred stock units outstanding during the year. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased for the assumed exercise of dilutive options, the assumed issuance of unvested restricted stock units and deferred stock units, and unvested performance-based restricted stock units for which the performance condition has been met as of the date of determination using the treasury stock method unless the effect is anti-dilutive. The treasury stock method assumes that proceeds, including cash received from the exercise of employee stock options and the ~~total~~average unrecognized compensation expense for unvested share-based compensation awards, would be used to purchase the ~~Company's~~Company’s common stock at the average market price during the period. ~~Prior to the January 2017 adoption of ASU 2016-09, the treasury stock method also included excess tax benefits in its proceeds calculation.~~

The following table summarizes net ~~earnings~~income attributable to shareholders and reconciles basic and diluted shares outstanding used in the earnings per share computations:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Net earnings attributable to shareholders	$	33,971	$	19,696	$	80,462	$	55,350
(In thousands)									2018		2017		2018		2017
Net income attributable to shareholders									$	39,298	$	17,090	$	87,931	$	46,491

Weighted average common shares outstanding – Basic	43,014		42,788		42,963		40,126		43,181		43,002		43,116		42,937
Dilutive impact of share-based compensation awards	87		83		129		73		365		58		408		153
Weighted average common shares outstanding – Diluted	43,101		42,871		43,092		40,199		43,546		43,060		43,524		43,090



Delaware		~~01-0526993~~01–0526993
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

97 Darling Avenue, South Portland, Maine		04106
(Address of principal executive offices)		(Zip Code)



Large accelerated filer	☒	(Do not check if a smaller reporting company)	Accelerated filer	☐
Non-accelerated filer	☐	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
			Emerging growth company	☐



FORWARD–LOOKING STATEMENTS		3
ACRONYMS AND ABBREVIATIONS		4
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2833
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4352
Item 4.	Controls and Procedures	4352
PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	4453
Item 1A.	Risk Factors	4453
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4453
Item 6.	Exhibits	4554
SIGNATURE



~~2014 Credit Agreement~~	Second amended and restated credit agreement entered into on August 22, 2014, by and among the Company and certain of its subsidiaries, as borrowers, WEX Card Holding Australia Pty Ltd., as designated borrower, and Bank of America, N.A., as administrative agent on behalf of consenting lenders
2016 Credit Agreement	Credit agreement entered into on July 1, 2016 by and among the Company and certain of its subsidiaries, as borrowers, WEX Card Holding Australia Pty Ltd., as designated borrower, and Bank of America, N.A., as administrative agent on behalf of the lenders, as amended.
2017 Tax Act	2017 Tax Cuts and Jobs Act
Adjusted Net Income or ANI	A non-GAAP measure that adjusts net income attributable to shareholders to exclude unrealized gains and losses on financial instruments, net foreign currency remeasurement gains and losses, acquisition-related intangible amortization, other acquisition and divestiture related items, stock-based compensation, restructuring and other costs, an impairment charge, debt restructuring and debt issuance cost amortization, adjustments attributed to our non-controlling interest and certain tax related items.
Segment adjusted operating income	A non-GAAP measure that adjusts operating income to exclude specified items that the ~~Company's~~Company’s management excludes in evaluating segment performance, including acquisition and divestiture related expenses and adjustments including the amortization of purchased intangibles, an impairment charge, the expense associated with stock-based compensation, restructuring and other costs, debt restructuring costs and ~~an impairment charge~~unallocated corporate expenses.
AOC	AOC Solutions and one of its affiliate companies, 3Delta Systems, Inc.
ASC	Accounting Standards Codification
ASU ~~2014-09~~2014–09	Accounting Standards Update No. ~~2014-09~~2014–09 Revenue from Contracts with Customers (Topic 606)
ASU ~~2016-09~~2016–01	Accounting Standards Update No. ~~2016-09 Compensation—Stock Compensation (Topic 718)~~2016–01 Financial Instruments – Overall (Subtopic 825–10): ~~Improvements to Employee Share-Based Payment Accounting~~Recognition and Measurement of Financial Assets and Financial Liabilities
ASU ~~2017-09~~2016–02	Accounting Standards Update No. ~~2017-09 Compensation—Stock Compensation~~2016–02 Leases (Topic ~~718)~~842)
ASU 2016–13	Accounting Standards Update No. 2016–13 Financial Instruments–Credit Losses (Topic 326): ~~Scope~~Measurement of ~~Modification~~ Credit Losses on Financial Instruments
ASU 2016–18	Accounting Standards Update No. 2016–18 Statement of Cash Flows (Topic 230): Restricted Cash
ASU 2017–07	Accounting Standards Update 2017–07 Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
Australian Securitization Subsidiary	Southern Cross WEX 2015–1 Trust, a bankruptcy-remote subsidiary consolidated by the Company
~~Average expenditure per payment processing transaction~~	~~Average total dollars of spend in a funded fuel transaction~~
Company	WEX Inc. and all entities included in the unaudited condensed consolidated financial statements
EBITDA	A non-GAAP measure that adjusts income before income taxes to exclude interest, depreciation and amortization
EFS	Electronic Funds Source, LLC, a provider of customized corporate payment solutions for fleet and corporate customers with a focus on the large and mid-sized over-the-road fleets. On July 1, 2016, the Company acquired WP Mustang Topco LLC, the indirect parent of Electronic Funds Source, LLC and Warburg Pincus Private Equity XI (Lexington), LLC, an affiliated entity, from investment funds affiliated with Warburg Pincus LLC
European ~~Fleet business~~	~~European commercial fleet card portfolio acquired from ExxonMobil~~
~~European~~ Securitization Subsidiary	Gorham Trade Finance B.V., a bankruptcy-remote subsidiary consolidated by the Company
~~Evolution1~~	~~EB Holdings Corp. and its subsidiaries which includes Evolution1, Inc., acquired by the Company on July 16, 2014~~
FASB	Financial Accounting Standards Board
FDIC	Federal Deposit Insurance Corporation
GAAP	Generally Accepted Accounting Principles in the United States
ICS	Insured Cash Sweep
Indenture	The Notes were issued pursuant to an indenture dated as of January 30, 2013 among the Company, the guarantors listed therein, and The Bank of New York Mellon Trust Company, N.A., as trustee
~~NCI~~	~~Non-controlling interest~~
NYSE	New York Stock Exchange
Notes	$400 million notes with a 4.75% fixed rate, issued on January 30, 2013
Over-the-road	Typically heavy trucks traveling long distances
Payment solutions purchase volume	Total amount paid by customers for transactions
Payment processing transactions	Funded payment transactions where the Company maintains the receivable for total purchase
SaaS	Software-as-a-service
SEC	Securities and Exchange Commission
~~Ticking fees~~	~~A fee incurred by a borrower to compensate the lender for maintaining a commitment of funds for the borrower for a period of time~~
Total fuel transactions	Total of transaction processing and payment processing transactions of our Fleet Solutions segment
Transaction processing transactions	Unfunded payment transactions where the Company is the processor and only has receivables for the processing fee
WEX Latin America	UNIK S.A., the Company's Brazilian subsidiary, which has been subsequently branded WEX Latin America
WEX	WEX Inc.
WEX Health	Evolution1 and Benaissance, collectively



	September 30, 2017			December 31, 2016
Assets
Cash and cash equivalents	$	251,118		$	190,930
Accounts receivable (net of allowances of $32,712 in 2017 and $20,092 in 2016)	2,595,371			2,054,701
Securitized accounts receivable, restricted	150,845			97,417
Income taxes receivable	12,904			10,765
Available-for-sale securities	23,584			23,525
Property, equipment and capitalized software (net of accumulated depreciation of $264,098 in 2017 and $228,336 in 2016)	185,350			167,278
Deferred income taxes, net	8,462			6,934
Goodwill	1,813,805			1,838,441
Other intangible assets (net of accumulated amortization of $375,004 in 2017 and $254,142 in 2016)	1,155,631			1,265,468
Other assets	344,058			341,638
Total assets	$	6,541,128		$	5,997,097
Liabilities and Stockholders’ Equity
Accounts payable	$	849,326		$	617,118
Accrued expenses	318,402			331,579
Deposits	1,091,530			1,118,823
Borrowed federal funds	28,462			—
Securitized debt	122,475			84,323
Revolving line of credit facilities and term loans, net	1,727,472			1,599,291
Deferred income taxes, net	149,605			152,906
Notes outstanding, net	396,085			395,534
Other debt	166,264			125,755
Amounts due under tax receivable agreement	38,375			47,302
Other liabilities	20,178			18,719
Total liabilities	4,908,174			4,491,350
Commitments and contingencies
Stockholders’ Equity
Common stock $0.01 par value; 175,000 shares authorized; 47,349 shares issued in 2017 and 47,173 in 2016; 42,921 shares outstanding in 2017 and 42,841 in 2016	473			472
Additional paid-in capital	561,155			547,627
Non-controlling interest	8,446			8,558
Retained earnings	1,324,994			1,244,271
Accumulated other comprehensive loss	(89,772		)	(122,839		)
Treasury stock at cost; 4,428 shares in 2017 and 2016	(172,342		)	(172,342		)
Total stockholders’ equity	1,632,954			1,505,747
Total liabilities and stockholders’ equity	$	6,541,128		$	5,997,097



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	June 30, 2018			December 31, 2017
Assets
Cash and cash equivalents	$	310,784		$	508,072
Restricted cash	25,009			18,866
Accounts receivable (net of allowances of $30,247 in 2018 and $30,207 in 2017)	3,087,354			2,517,980
Securitized accounts receivable, restricted	168,274			150,235
Prepaid expenses and other current assets	79,838			69,413
Total current assets	3,671,259			3,264,566
Property, equipment and capitalized software (net of accumulated depreciation of $292,111 in 2018 and $264,928 in 2017)	161,708			163,908
Goodwill	1,843,575			1,876,132
Other intangible assets (net of accumulated amortization of $456,537 in 2018 and $392,827 in 2017)	1,103,330			1,154,047
Investment securities	22,970			23,358
Deferred income taxes, net	6,410			7,752
Other assets	142,725			253,088
Total assets	$	6,951,977		$	6,742,851
Liabilities and Stockholders’ Equity
Accounts payable	$	1,015,226		$	811,362
Accrued expenses	304,346			315,346
Short-term deposits	828,243			986,989
Short-term debt, net	379,538			397,218
Other current liabilities	21,959			24,795
Total current liabilities	2,549,312			2,535,710
Long-term debt, net	2,125,109			2,027,752
Long-term deposits	326,303			306,865
Deferred income taxes, net	130,266			119,283
Other liabilities	28,991			32,683
Total liabilities	5,159,981			5,022,293
Commitments and contingencies (Note 13)
Stockholders’ Equity
Common Stock $0.01 par value; 175,000 shares authorized; 47,514 shares issued in 2018 and 47,352 in 2017; 43,086 shares outstanding in 2018 and 43,022 in 2017	475			473
Additional paid-in capital	574,818			569,319
Retained earnings	1,493,255			1,404,683
Accumulated other comprehensive loss	(114,079		)	(90,795		)
Treasury stock at cost; 4,428 shares in 2018 and 2017	(172,342		)	(172,342		)
Total WEX Inc. stockholders’ equity	1,782,127			1,711,338
Non-controlling interest	9,869			9,220
Total stockholders’ equity	1,791,996			1,720,558
Total liabilities and stockholders’ equity	$	6,951,977		$	6,742,851



	Common Stock
	Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Treasury Stock			Retained Earnings		Non-Controlling Interest			Total Stockholders' Equity
Balance at January 1, 2016	38,746	$	431	$	174,972		$	(103,451	)	$	(172,342	)	$	1,183,634	$	12,437		$	1,095,681
Stock issued upon exercise of stock options	21	—		283			—			—			—		—			283
Tax expense from stock option and restricted stock units	—	—		(300		)	—			—			—		—			(300		)
Stock issued upon vesting of restricted and deferred stock units	61	1		—			—			—			—		—			1
Stock-based compensation, net of share repurchases for tax withholdings	—	—		12,142			—			—			—		—			12,142
Changes in available-for-sale securities, net of tax expense of $123	—	—		—			209			—			—		—			209
Stock issued for July 1, 2016 purchase of EFS	4,012	40		354,913			—			—			—		—			354,953
Foreign currency translation	—	—		—			709			—			—		190			899
Net income (loss)	—	—		—			—			—			55,350		(1,013		)	54,337
Balance at September 30, 2016	42,840	$	472	$	542,010		$	(102,533	)	$	(172,342	)	$	1,238,984	$	11,614		$	1,518,205
Balance at January 1, 2017	42,841	$	472	$	547,627		$	(122,839	)	$	(172,342	)	$	1,244,271	$	8,558		$	1,505,747
Cumulative-effect adjustment¹	—	—		—			—			—			261		—			261
Stock issued upon exercise of stock options	11	—		595			—			—			—		—			595
Stock issued upon vesting of restricted and deferred stock units	69	1		(1		)	—			—			—		—			—
Stock-based compensation, net of share repurchases for tax withholdings	—	—		12,934			—			—			—		—			12,934
Changes in available-for-sale securities, net of tax expense of $53	—	—		—			97			—			—		—			97
Foreign currency translation	—	—		—			32,970			—			—		774			33,744
Net income (loss)	—	—		—			—			—			80,462		(886		)	79,576
Balance at September 30, 2017	42,921	$	473	$	561,155		$	(89,772	)	$	(172,342	)	$	1,324,994	$	8,446		$	1,632,954



	Common Stock Issued			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Treasury Stock			Retained Earnings		Non-Controlling Interest			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Treasury Stock			Retained Earnings		Non-Controlling Interest			Total Stockholders’ Equity
Balance at December 31, 2016	47,173	$	472	$	547,627		$	(122,839	)	$	(172,342	)	$	1,244,271	$	8,558		$	1,505,747
Cumulative-effect adjustment¹	—	—		—			—			—			260		—			260
Balance at January 1, 2017	47,173	$	472	$	547,627		$	(122,839	)	$	(172,342	)	$	1,244,531	$	8,558		$	1,506,007
Stock issued	170	1		430			—			—			—		—			431
Share repurchases for tax withholdings	—	—		(9,195		)	—			—			—		—			(9,195		)
Stock-based compensation expense	—	—		13,871			—			—			—		—			13,871
Changes in investment securities, net of tax expense of $61	—	—		—			109			—			—		—			109
Foreign currency translation	—	—		—			22,161			—			—		541			22,702
Net income (loss)	—	—		—			—			—			46,491		(775		)	45,716
Balance at June 30, 2017	47,343	$	473	$	552,733		$	(100,569	)	$	(172,342	)	$	1,291,022	$	8,324		$	1,579,641

Balance at December 31, 2017	47,352	$	473	$	569,319		$	(90,795	)	$	(172,342	)	$	1,404,683	$	9,220		$	1,720,558
Cumulative-effect adjustment²	—	—		—			—			—			641		—			641
Balance at January 1, 2018	47,352	$	473	$	569,319		$	(90,795	)	$	(172,342	)	$	1,405,324	$	9,220		$	1,721,199
Stock issued	162	2		1,449			—			—			—		—			1,451
Share repurchases for tax withholdings	—	—		(11,810		)	—			—			—		—			(11,810		)
Stock-based compensation expense	—	—		15,860			—			—			—		—			15,860
Foreign currency translation	—	—		—			(23,284		)	—			—		(194		)	(23,478		)
Net income	—	—		—			—			—			87,931		843			88,774
Balance at June 30, 2018	47,514	$	475	$	574,818		$	(114,079	)	$	(172,342	)	$	1,493,255	$	9,869		$	1,791,996



	As Reported December 31, 2016			Measurement Period Adjustments			As Reported, Final
Total consideration, net of cash acquired	$	1,444,235		$	—		$	1,444,235
Less:
Accounts receivable	162,684			—			162,684
Property and equipment	2,387			1			2,388
Customer relationships (a)(b)	842,700			(1,300		)	841,400
Developed technologies (a)(c)	32,120			—			32,120
Trademarks and trade names (a)(d)	13,700			—			13,700
Deferred income tax assets	34,992			6,352			41,344
Other assets	—			739			739
Accounts payable	(153,777		)	248			(153,529		)
Accrued expenses	(128,267		)	9,361			(118,906		)
Deferred income tax liabilities	(91,194		)	28,071			(63,123		)
Recorded goodwill (a)	$	728,890		$	(43,472	)	$	685,418



Remaining 2017	$	21,344
2018	$	80,987
2019	$	74,548
2020	$	68,685
2021	$	60,654
2022	$	53,537
Thereafter	$	427,408



	Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
Total revenues	$	287,756	$	799,039
Net earnings attributable to shareholders	$	27,973	$	48,584
Net income attributable to shareholders per share:
Basic	$	0.65	$	1.14
Diluted	$	0.65	$	1.13



	September 30,
Delinquency Status	2017		2016
Current–29 days past due	95	%	93	%
Current–59 days past due	97	%	97	%



	Tranche A	Tranche B	Tranche C
Notional amount at inception	$400,000	$150,000	$250,000
Amortization	5% annually	N/A	N/A
Maturity date	December 31, 2020	December 31, 2020	December 31, 2018
Fixed interest rate	1.108%	1.125%	0.896%



1.	Basis of Presentation



2.	~~New Accounting Standards~~



6.7.	Derivative Instruments



	Aggregate Notional Amount
	September 30,
	2017		2016
Australian dollar	A$	10,000	A$	10,000



Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	September 30, 2017		December 31, 2016
Interest rate swaps	Other assets	$	12,059	$	12,908



Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) on Derivatives Recognized in Income	Three Months Ended September 30,					Nine Months Ended September 30,
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) on Derivatives Recognized in Income	2017			2016		2017			2016
Commodity contracts	Net realized and unrealized gain on fuel price derivatives	$	—		$	—	$	—		$	711
Interest rate swap agreements - unrealized portion	Net unrealized loss on interest rate swap agreements	$	(150	)	$	—	$	(849	)	$	—
Interest rate swap agreements - realized portion	Financing interest income (expense)	$	377		$	—	$	(243	)	$	—



	September 30, 2017		December 31, 2016
Revolving line of credit facility and term loans	$	33,514	$	38,334
Notes outstanding ¹	$	3,915	$	4,466



8.10.	~~Off-Balance~~Off–Balance Sheet ~~Arrangements~~Arrangement



	Fair Value Hierarchy	September 30, 2017		December 31, 2016
Assets
Municipal bonds	2	$	534	$	682
Asset-backed securities	2	395		648
Mortgage-backed securities	2	450		490
Fixed-income mutual fund	1	22,205		21,705
Available-for-sale securities		$	23,584	$	23,525
Executive deferred compensation plan trust ^(a)	1	$	6,517	$	5,673
Interest rate swaps ^(a)	2	$	12,059	$	12,908



Exercise price	$	99.69
Expected stock price volatility	31.14		%
Risk-free interest rate	2.18		%
Weighted average fair value of performance options granted	$	28.69


	March 20, 2017			2018			2017
Weighted average expected life (in years)	6.0			6.0			6.0
Weighted average exercise price	$	104.95		$	158.23		$	104.95
Weighted average volatility	30.67		%
Weighted average risk-free rate	2.13		%
Expected stock price volatility				27.35		%	30.67		%
Risk-free interest rate				2.69		%	2.13		%
Weighted average fair value	$	35.58		$	51.27		$	35.58



	Six Months Ended June 30, 2017
(In thousands)	Fleet Solutions		Travel and Corporate Solutions		Health and Employee Benefit Solutions		Total
Revenues
Payment processing revenue	$	173,940	$	75,151	$	28,641	$	277,732
Account servicing revenue	77,380		322		49,514		127,216
Finance fee revenue	72,981		382		12,094		85,457
Other revenue	66,826		26,858		11,152		104,836
Total revenues	$	391,127	$	102,713	$	101,401	$	595,241

Interest income	$	1,820	$	361	$	12,354	$	14,535


	Actual Amount		Ratio		Minimum for Capital Adequacy Purposes Amount		Ratio		Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount		Ratio
September 30, 2017
(In thousands)													Actual Amount		Ratio		Minimum for Capital Adequacy Purposes Amount		Ratio		Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount		Ratio
June 30, 2018
Total Capital to risk-weighted assets	$	326,773	13.12	%	$	199,249	8.0	%	$	249,061	10.0	%	$	334,555	12.09	%	$	221,347	8.0	%	$	276,683	10.0	%
Tier 1 Capital to average assets	$	314,473	12.09	%	$	104,004	4.0	%	$	130,004	5.0	%	$	321,557	11.56	%	$	111,265	4.0	%	$	139,082	5.0	%
Common equity to risk-weighted assets	$	314,473	12.63	%	$	112,078	4.5	%	$	161,890	6.5	%	$	321,557	11.62	%	$	124,507	4.5	%	$	179,844	6.5	%
Tier 1 Capital to risk-weighted assets	$	314,473	12.63	%	$	149,437	6.0	%	$	199,250	8.0	%	$	321,557	11.62	%	$	166,010	6.0	%	$	221,347	8.0	%
December 31, 2016
December 31, 2017
Total Capital to risk-weighted assets	$	228,402	12.59	%	$	145,182	8.0	%	$	181,477	10.0	%	$	316,129	13.38	%	$	188,991	8.0	%	$	236,239	10.0	%
Tier 1 Capital to average assets	$	214,847	11.10	%	$	77,413	4.0	%	$	96,767	5.0	%	$	304,555	12.50	%	$	97,452	4.0	%	$	121,815	5.0	%
Common equity to risk-weighted assets	$	214,847	11.84	%	$	81,665	4.5	%	$	117,961	6.5	%	$	304,555	12.89	%	$	106,308	4.5	%	$	153,555	6.5	%
Tier 1 Capital to risk-weighted assets	$	214,847	11.84	%	$	108,887	6.0	%	$	145,183	8.0	%	$	304,555	12.89	%	$	141,743	6.0	%	$	188,991	8.0	%



(in thousands, except per transaction and per gallon data)	Three Months Ended September 30,				Increase (Decrease)				Nine Months Ended September 30,				Increase (Decrease)
(in thousands, except per transaction and per gallon data)	2017		2016		Amount		Percent		2017		2016		Amount		Percent
Revenues
Payment processing revenue	$	90,270	$	83,132	$	7,138	9	%	$	264,210	$	216,133	$	48,077	22	%
Account servicing revenue	44,858		37,414		7,444		20		122,238		90,400		31,838		35
Finance fee revenue	40,773		33,230		7,543		23		113,754		85,841		27,913		33
Other revenue	36,177		30,982		5,195		17		103,003		57,417		45,586		79
Total revenues	212,078		184,758		27,320		15		603,205		449,791		153,414		34
Total operating expenses	182,964		162,442		20,522		13		525,001		385,741		139,260		36
Operating income	$	29,114	$	22,316	$	6,798	30	%	$	78,204	$	64,050	$	14,154	22	%

Key operating statistics
Payment processing revenue:
Payment processing transactions	110,047		102,947		7,100		7	%	320,946		286,199		34,747		12	%
Average expenditure per payment processing transaction	$	69.87	$	64.05	$	5.82	9	%	$	69.07	$	56.48	$	12.59	22	%
Average price per gallon of fuel:
Domestic – ($/gal)	$	2.51	$	2.24	$	0.27	12	%	$	2.44	$	2.18	$	0.26	12	%
Australia – ($/gal)	$	3.78	$	3.45	$	0.33	10	%	$	3.73	$	3.28	$	0.45	14	%
Account servicing revenue:
Average number of vehicles serviced	11,000		10,337		663		6	%	10,808		9,832		976		10	%



(in thousands)	Nine Months Ended September 30,
Net cash (used for) provided by:	2017			2016
Operating activities	$	(45,669	)	$	(80,873	)
Investing activities	$	(56,005	)	$	(1,139,562	)
Financing activities	$	177,109		$	1,472,062



	Exhibit No.	Description
	3.1	Certificate of Incorporation (incorporated by reference to Exhibit No. 3.1 to our Current Report on Form ~~8-K~~8–K filed with the SEC on March 1, 2005, File No. 001-32426)
	3.2	Certificate of Ownership and Merger merging WEX Transitory Corporation with and into Wright Express Corporation (incorporated by reference to Exhibit No. 3.1 to our Current Report on Form 8-K filed with the SEC on October 30, 2012, File No. 001-32426)
	3.3	Amended and Restated By-Laws of WEX Inc. (incorporated by reference to Exhibit No. 3.1 to our Current Report on Form 8-K filed with the SEC on October 30, 2012, ~~File No. 001-32426)~~
*	~~10.1~~	~~Form of Non-Employee Director Compensation Plan~~
	~~10.2~~	First Amendment to Credit Agreement, dated as of July 3, 2017, by and among WEX Inc., the subsidiaries of WEX Inc. identified therein, the lenders party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit No. 10.1 to our Current Report on Form 8-K filed with the SEC on July 3, 2017, File No. 001-32426)
*	31.1	Certification of Chief Executive Officer of WEX INC. pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended
*	31.2	Certification of Chief Financial Officer of WEX INC. pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended
*	32.1	Certification of Chief Executive Officer of WEX INC. pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code
*	32.2	Certification of Chief Financial Officer of WEX INC. pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code
*	101.INS	XBRL Instance Document
*	101.SCH	XBRL Taxonomy Extension Schema Document
*	101.CAL	XBRL Taxonomy Calculation Linkbase Document
*	101.LAB	XBRL Taxonomy Label Linkbase Document
*	101.PRE	XBRL Taxonomy Presentation Linkbase Document
*	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document



*	These exhibits have been filed with this Quarterly Report on Form ~~10-Q.~~10–Q.



	WEX INC.

~~November~~August 8, ~~2017~~2018	By:	/s/ Roberto Simon
		Roberto Simon
		Chief Financial Officer
		(principal financial officer and principal accounting officer)