Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | WEX Inc. | |
Trading Symbol | WEX | |
Entity Central Index Key | 1,309,108 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 43,091,533 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | ||||
Payment processing revenue | $ 236,824 | $ 476,539 | ||
Account servicing revenue | 78,716 | $ 65,677 | 157,420 | $ 127,216 |
Finance fee revenue | 51,573 | 42,085 | 101,255 | 85,457 |
Other revenue | 61,849 | 54,768 | 119,838 | 104,836 |
Total revenues | 370,876 | 303,884 | 725,705 | 595,241 |
Cost of services | ||||
Service fees | 13,809 | 20,177 | 26,029 | 37,755 |
Provision for credit losses | 11,505 | 16,082 | 25,495 | 28,313 |
Operating interest | 9,528 | 4,619 | 18,013 | 9,512 |
Depreciation and amortization | 20,612 | 18,376 | 41,045 | 35,760 |
Total cost of services | 131,760 | 128,487 | 266,510 | 244,903 |
General and administrative | 48,488 | 40,073 | 103,921 | 82,250 |
Sales and marketing | 57,697 | 39,983 | 114,238 | 80,141 |
Depreciation and amortization | 30,020 | 31,585 | 59,763 | 63,439 |
Impairment charge | 0 | 16,175 | 0 | 16,175 |
Operating income | 102,911 | 47,581 | 181,273 | 108,333 |
Financing interest expense | (25,505) | (28,547) | (52,842) | (55,695) |
Net foreign currency (loss) gain | (26,734) | 10,525 | (26,344) | 18,967 |
Net unrealized gain (loss) on financial instruments | 2,706 | (2,264) | 16,214 | (699) |
Income before income taxes | 53,378 | 27,295 | 118,301 | 70,906 |
Income taxes | 13,938 | 10,655 | 29,527 | 25,190 |
Net income | 39,440 | 16,640 | 88,774 | 45,716 |
Less: Net income (loss) from non-controlling interest | 142 | (450) | 843 | (775) |
Net income attributable to shareholders | $ 39,298 | $ 17,090 | $ 87,931 | $ 46,491 |
Net income attributable to WEX Inc. per share: | ||||
Basic (in dollars per share) | $ 0.91 | $ 0.40 | $ 2.04 | $ 1.08 |
Diluted (in dollars per share) | $ 0.90 | $ 0.40 | $ 2.02 | $ 1.08 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 43,181 | 43,002 | 43,116 | 42,937 |
Diluted (in shares) | 43,546 | 43,060 | 43,524 | 43,090 |
Payment processing revenue | ||||
Revenues | ||||
Payment processing revenue | $ 178,738 | $ 141,354 | $ 347,192 | $ 277,732 |
Cost of services | ||||
Processing costs | $ 76,306 | $ 69,233 | $ 155,928 | $ 133,563 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 39,440 | $ 16,640 | $ 88,774 | $ 45,716 |
Changes in investment securities, net of tax expense of $60 and $61 for the three and six months ended June 30, 2017, respectively | 0 | 106 | 0 | 109 |
Foreign currency translation | (25,413) | 6,082 | (23,478) | 22,702 |
Comprehensive income | 14,027 | 22,828 | 65,296 | 68,527 |
Less: Comprehensive (loss) income attributable to non-controlling interest | (342) | 49 | 649 | (234) |
Comprehensive income attributable to WEX Inc. | $ 14,369 | $ 22,779 | $ 64,647 | $ 68,761 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Changes in investment securities, tax effect | $ 60 | $ 61 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 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 |
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 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, reserve for credit losses | $ 30,247 | $ 30,207 |
Property, equipment and capitalized software, accumulated depreciation | 292,111 | 264,928 |
Accumulated amortization | $ 456,537 | $ 392,827 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 |
Common stock, shares issued (in shares) | 47,514,000 | 47,352,000 |
Common stock, shares outstanding (in shares) | 43,086,000 | 43,022,000 |
Treasury stock, shares (in shares) | 4,428,000 | 4,428,000 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock Issued | Additional Paid–In Capital | Accumulated Other Comprehensive Loss | Treasury Stock | Retained Earnings | Non–Controlling Interest | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative-effect adjustment | [1] | $ 260 | $ 260 | |||||
Beginning balances, adjusted | 1,506,007 | $ 472 | $ 547,627 | $ (122,839) | $ (172,342) | 1,244,531 | $ 8,558 | |
Beginning Balance (in shares) at Dec. 31, 2016 | 47,173 | |||||||
Beginning balance at Dec. 31, 2016 | 1,505,747 | $ 472 | 547,627 | (122,839) | (172,342) | 1,244,271 | 8,558 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock issued (in shares) | 170 | |||||||
Stock issued | 431 | $ 1 | 430 | |||||
Share repurchases for tax withholdings | (9,195) | (9,195) | ||||||
Stock-based compensation expense | 13,871 | 13,871 | ||||||
Changes in available-for-sale securities, net of tax expense | 109 | 109 | ||||||
Foreign currency translation | 22,702 | 22,161 | 541 | |||||
Net income | 45,716 | 46,491 | (775) | |||||
Ending Balance (in shares) at Jun. 30, 2017 | 47,343 | |||||||
Ending balance at Jun. 30, 2017 | 1,579,641 | $ 473 | 552,733 | (100,569) | (172,342) | 1,291,022 | 8,324 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative-effect adjustment | [2] | 641 | 641 | |||||
Beginning balances, adjusted | 1,721,199 | $ 473 | 569,319 | (90,795) | (172,342) | 1,405,324 | 9,220 | |
Beginning Balance (in shares) at Dec. 31, 2017 | 47,352 | |||||||
Beginning balance at Dec. 31, 2017 | 1,720,558 | $ 473 | 569,319 | (90,795) | (172,342) | 1,404,683 | 9,220 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock issued (in shares) | 162 | |||||||
Stock issued | 1,451 | $ 2 | 1,449 | |||||
Share repurchases for tax withholdings | (11,810) | (11,810) | ||||||
Stock-based compensation expense | 15,860 | 15,860 | ||||||
Changes in available-for-sale securities, net of tax expense | 0 | |||||||
Foreign currency translation | (23,478) | (23,284) | (194) | |||||
Net income | 88,774 | 87,931 | 843 | |||||
Ending Balance (in shares) at Jun. 30, 2018 | 47,514 | |||||||
Ending balance at Jun. 30, 2018 | $ 1,791,996 | $ 475 | $ 574,818 | $ (114,079) | $ (172,342) | $ 1,493,255 | $ 9,869 | |
[1] | Includes the impact of modified retrospective transition as part of the Company’s adoption of ASU 2016–09 to recognize previously disallowed excess tax benefits that increased a net operating loss. | |||||||
[2] | Includes the impact of modified retrospective adoption of Topic 606. |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Changes in available-for-sale securities, tax effect | $ 61 |
CONDENSED CONSOLIDATED STATEME9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | ||
Cash flows from operating activities | |||
Net income | $ 88,774 | $ 45,716 | |
Adjustments to reconcile net income to net cash used for operating activities: | |||
Net unrealized loss | 43 | 4,457 | |
Stock-based compensation | 15,860 | 13,871 | |
Depreciation and amortization | 100,808 | 99,199 | |
Debt restructuring and debt issuance cost amortization | 5,819 | 4,163 | |
Provision for deferred taxes | 11,849 | 14,924 | |
Provision for credit losses | 25,495 | 28,313 | |
Impairment charge | 0 | 16,175 | |
Changes in operating assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable and securitized receivables | (645,356) | (423,854) | |
Prepaid expenses and other current and other long-term assets | 117,954 | (3,193) | |
Accounts payable | 220,909 | 111,251 | |
Accrued expenses | (9,322) | 3,322 | |
Income taxes | 2,520 | 1,458 | |
Other current and other long-term liabilities | (9,382) | (1,665) | |
Amounts due under tax receivable agreement | (3,827) | (5,899) | |
Net cash used for operating activities | (77,856) | (91,762) | |
Cash flows from investing activities | |||
Purchases of property, equipment and capitalized software | (34,624) | (37,480) | |
Purchase of equity investment | (2,617) | 0 | |
Purchases of investment securities | (244) | (230) | |
Maturities of investment securities | 100 | 272 | |
Net cash used for investing activities | (37,385) | (37,438) | |
Cash flows from financing activities | |||
Repurchase of share-based awards to satisfy tax withholdings | (11,810) | (9,194) | |
Proceeds from stock option exercises | 1,451 | 431 | |
Net change in deposits | (138,894) | 2,631 | |
Net activity on other debt | 62,992 | 22,980 | |
Borrowings on revolving credit facility | 931,888 | 2,353,261 | |
Repayments of revolving credit facility | (1,068,522) | (2,205,038) | |
Borrowings on term loans | 153,000 | 0 | |
Repayments on term loans | (18,152) | (17,375) | |
Debt issuance costs | (2,907) | 0 | |
Net change in securitized debt | 22,773 | 13,662 | |
Net cash (used for) provided by financing activities | (68,181) | 161,358 | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (7,723) | (3,930) | |
Net change in cash, cash equivalents and restricted cash | (191,145) | 28,228 | |
Cash, cash equivalents and restricted cash, beginning of period | [1] | 526,938 | 213,342 |
Cash, cash equivalents and restricted cash, end of period | [1] | 335,793 | 241,570 |
Capital expenditures incurred but not paid | 1,258 | 6,076 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||
Cash, cash equivalents and restricted cash | [1] | $ 526,938 | $ 213,342 |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our unaudited condensed consolidated balance sheets to amounts reported within our unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2018 and 2017: |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10–Q and Rule 10–01 of Regulation S–X. Accordingly, they do not include all information and notes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements that are included in the Company’s Annual Report on Form 10–K for the year ended December 31, 2017 , filed with the SEC on March 1, 2018 . In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results for any future periods or the year ending December 31, 2018 . The Company rounds amounts in the unaudited condensed consolidated financial statements to thousands and calculates all per-share data from underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot or recalculate based on reported numbers due to rounding. Changes to Prior Year Financial Statement Presentation Effective January 1, 2018, the Company modified the presentation of the balance sheets and statements of income and changed how it allocates certain costs to our segments. These changes enhance the information reported to the users of our financial statements. The Company now classifies assets and liabilities as current and non-current within our unaudited condensed consolidated balance sheets as defined according to the normal twelve month operating cycle of our business. Prior period amounts have been recast to conform with this presentation. As a result of this change, total assets and total liabilities have increased by approximately $3.7 million compared to what was reported within our Annual Report on Form 10–K for the year ended December 31, 2017 due to a gross-up of interest rate swap arrangements to reflect their corresponding short and long-term portions. See Note 11 , Fair Value, for more information on the fair value of our interest rate swap arrangements. Additionally, the Company has modified the presentation of certain line items in its unaudited condensed consolidated statements of income. Under the new presentation, costs of services are segregated from other operating expenses. Operating expenses have been reclassified into functional categories in order to provide additional detail into the underlying drivers of changes in operating expenses and align presentation with industry practice. The revised presentation did not result in a change to previously reported revenues, operating income, income before income taxes or net income. Effective with the change in financial statement presentation noted above, the Company now reports expenses in the categories noted below. No changes have been made to non-operating expenses. Cost of Services • Processing costs - The Company’s processing costs consist of expenses related to processing transactions, servicing customers and merchants, cost of goods sold related to hardware and other product sales. • Service fees - The Company incurs costs from third-party networks utilized to deliver payment solutions. Additionally, other third-parties are utilized in performing services directly related to generating revenue. With the adoption of Topic 606 effective January 1, 2018, fees paid to third-party payment processing networks are no longer recorded as service fees and are now presented as a reduction of revenues. • Provision for credit losses - Changes in the reserve for credit loss are the result of changes in management’s estimate of the losses in the Company’s outstanding portfolio of receivables, including losses from fraud. • Operating interest - The Company incurs interest expense on the operating debt obtained to provide liquidity for its short-term receivables. • Depreciation and amortization - The Company has identified those tangible and intangible assets directly associated with providing a service that generates revenue and records the depreciation and amortization associated with those assets under this category. Such assets include processing platforms and related infrastructure, acquired developed technology intangible assets, and other similar asset types. 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. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 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. 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. 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 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. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 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, including the Company’s finance fee and interest income from banking relationships and cardholders, certain other fees associated with cardholder arrangements and commissions paid related to such agreements, which continue to be within the scope of ASC Topic 310, Receivables (“Topic 310”). The vast majority of the Company’s Topic 606 revenue is derived from 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. 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. • 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 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. 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 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 Receivables 1 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 1 The majority of the Company’s receivables, excluded from the table above, are either due from cardholders, who have 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 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 $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 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, the 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. 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 fees 1 $ 30,803 $ 52,182 $ 32,160 $ 16,699 $ 7,394 $ 683 $ 139,921 Professional services 2 9,691 4,183 — — — — 13,874 Total remaining performance obligations $ 40,494 $ 56,365 $ 32,160 $ 16,699 $ 7,394 $ 683 $ 153,795 1 The transaction price allocated to the remaining performance obligations represents the minimum monthly fees on certain service contracts, which contain substantive termination penalties that require the 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 services sold subsequent to the core offerings, to which the customer is contractually obligated. |
Business Acquisition
Business Acquisition | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Business Acquisition | 4. Business Acquisition AOC Effective O ctober 18, 2017 , the Company acquired certain assets and assumed certain liabilities of AOC, an industry leader in commercial payments technology. The acquisition 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 evolve with the needs of our customers and partners through the use of AOC’s payments processing technology platforms. The Company purchased AOC for $129.8 million , which was funded with cash on hand and through borrowings under the 2016 Credit Agreement. The Company records adjustments to the assets acquired and liabilities assumed throughout the measurement period, which may be up to one year from the acquisition date. The Company has obtained information to assist in determining the fair values of certain assets acquired and liabilities assumed since the acquisition, resulting primarily in the recording of other intangible assets and 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. During the second quarter of 2018, the Company assigned $21.6 million of the purchase price to an acquired processing platform that is 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 project. The Company has not finalized the purchase accounting is still reviewing the valuation and tax basis 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 independent valuation for intangible assets identified in the table below. The preliminary estimates could change significantly upon completion of this evaluation. The goodwill recognized in this business combination will be deductible for income tax purposes. The following is a summary of the preliminary allocation of the purchase price to the assets and liabilities acquired: (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) Weighted average life – 9.0 years . (b) Weighted average life – 3.4 years . (c) Weighted average life – 4.3 years . (a) (b) (c) The weighted average life of these amortized intangible assets is 5.5 years . Since the acquisition date, the operations of AOC contributed net revenues of approximately $6.7 million and net loss before taxes of approximately $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 period that they were not part of the Company are not material to the Company’s revenues, net income and earnings per share. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Accounts Receivable | 5. Accounts Receivable In general, the Company’s trade receivables provide for payment terms of 30 days or less. Receivables not paid within the terms of the agreement are generally subject to late fees based upon the outstanding receivable balance. The Company extends revolving credit to certain small 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 $18.0 million and $12.2 million in receivables with revolving credit balances as of June 30, 2018 and December 31, 2017 , respectively. Concentration of Credit Risk The receivables portfolio consists of a large group of homogeneous smaller balances across a wide range of industries, which are collectively evaluated for impairment. No one customer receivable balance represented 10 percent or more of the outstanding receivables balance at June 30, 2018 or December 31, 2017. The following table presents the 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: 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 when they are 150 days past due or upon declaration of bankruptcy of 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 payment patterns, known fraudulent activity in the portfolio, as well as leading economic and market indicators. 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 accounts 1 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 1 The 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. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 6. Earnings per Share Basic earnings per share is computed by dividing net 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 average unrecognized compensation expense for unvested share-based compensation awards, would be used to purchase the Company’s common stock at the average market price during the period. The following table summarizes net income attributable to shareholders and reconciles basic and diluted shares outstanding used in the earnings per share computations: Three Months Ended June 30, Six Months Ended June 30, (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 43,181 43,002 43,116 42,937 Dilutive impact of share-based compensation awards 365 58 408 153 Weighted average common shares outstanding – Diluted 43,546 43,060 43,524 43,090 For the three and six months ended June 30, 2018 and June 30, 2017 , an immaterial number of outstanding share-based compensation awards were excluded from the computation of diluted earnings per share, as the effect of including these awards would be anti-dilutive. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 7. Derivative Instruments The Company is exposed to certain market risks relating to its ongoing business operations. From time to time, the Company enters into derivative instrument arrangements to manage various risks including interest rate risk, foreign exchange risk and commodity price risk. Interest Rate Swap Agreements During 2016 and 2017, we entered into five interest rate swap contracts. Collectively, these derivative contracts are intended to fix the future interest payments associated with $1.3 billion of our variable rate borrowings at between 0.896% and 2.212% . At June 30, 2018 , we had variable-rate borrowings of $1.7 billion under our 2016 Credit Agreement. The notional amounts, fixed and variable interest rates and maturities of the interest rate swap agreements are as follows: Tranche A Tranche B Tranche C Tranche D Tranche E Notional amount at inception (in thousands) $300,000 $200,000 $400,000 $150,000 $250,000 Amortization N/A N/A 5% annually N/A N/A Maturity date 12/30/2022 12/30/2022 12/31/2020 12/31/2020 12/31/2018 Fixed interest rate 2.204% 2.212% 1.108% 1.125% 0.896% The following table presents information on the location and amounts of interest rate swap gains and losses: (In thousands) Three Months Ended June 30, Six Months Ended June 30, Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income Statement 2018 2017 2018 2017 Interest rate swap agreements – unrealized portion Net unrealized gain (loss) on financial instruments $ 3,944 $ (2,264 ) $ 17,452 $ (699 ) Interest rate swap agreements – realized portion Financing interest income (expense) $ 1,363 $ (77 ) $ 1,676 $ (620 ) See Note 11 , Fair Value, for more information regarding the valuation of the Company’s interest rate swaps. |
Deposits
Deposits | 6 Months Ended |
Jun. 30, 2018 | |
Banking and Thrift [Abstract] | |
Deposits | 8. Deposits WEX Bank has issued certificates of deposit with maturities ranging from four weeks to three years, with interest rates ranging from 1.15% to 2.90% as of June 30, 2018 and from 1.00% to 2.15% as of December 31, 2017. WEX Bank may issue brokered deposits, subject to FDIC rules governing minimum financial ratios, which include risk-based asset and capital requirements. As of June 30, 2018 , all brokered deposits were in denominations of $250 thousand or less, corresponding to FDIC deposit insurance limits. The Company requires deposits from certain customers as collateral for credit that has been extended. These deposits are generally non-interest bearing. Interest-bearing brokered money market deposits are issued in denominations of $250 thousand or less, and pay interest at variable rates based on LIBOR or the Federal Funds rate. Money market deposits may be withdrawn by the holder at any time, although notification may be required and the monthly number of transactions is limited. Interest-bearing brokered money market deposits and customer deposits are classified as short-term deposits on our unaudited condensed consolidated balance sheets. The following table presents the composition of deposits: (In thousands) June 30, 2018 December 31, 2017 Interest-bearing brokered money market deposits $ 317,685 $ 285,899 Customer deposits 77,000 70,211 Certificates of deposit with maturities within 1 year (a) 433,558 630,879 Short-term deposits 828,243 986,989 Certificates of deposit with maturities greater than 1 year and less than 5 years (a) 326,303 306,865 Total deposits $ 1,154,546 $ 1,293,854 Weighted average cost of funds on certificates of deposit outstanding 1.85 % 1.51 % Weighted average cost of interest-bearing brokered money market deposits 2.12 % 1.49 % (a) Certificates of deposit are classified as short-term or long-term within our unaudited condensed consolidated balance sheets based on maturity date. Sources of Funds WEX Bank participates in the ICS service offered by Promontory Interfinancial Network, which allows WEX Bank to purchase brokered money market demand accounts and demand deposit accounts in an amount not to exceed $125.0 million as part of a one-way buy program. At June 30, 2018 , the outstanding balance for ICS purchases totaled $50.0 million , which purchases are classified as interest-bearing brokered money market deposits in the table above. As of December 31, 2017, the company had made no such ICS purchases. |
Financing and Other Debt
Financing and Other Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Financing and Other Debt | 9. Financing and Other Debt The following table summarizes the Company’s total outstanding debt: (In thousands) June 30, 2018 December 31, 2017 Revolving line-of-credit facility under 2016 Credit Agreement (a) $ — $ 136,535 Term loans under 2016 Credit Agreement (a) 1,737,723 1,602,875 Notes outstanding (a) 400,000 400,000 Securitized debt 144,533 126,901 Participation debt 204,493 184,990 Borrowed federal funds 44,000 — WEX Latin America debt 7,889 9,747 Total gross debt $ 2,538,638 $ 2,461,048 Current portion of gross debt $ 387,228 $ 404,233 Less: Unamortized debt issuance costs (7,690 ) (7,015 ) Short-term debt, net $ 379,538 $ 397,218 Long-term gross debt $ 2,151,410 $ 2,056,815 Less: Unamortized debt issuance costs (26,301 ) (29,063 ) Long-term debt, net $ 2,125,109 $ 2,027,752 Supplemental information under 2016 Credit Agreement: Letters of credit (b) $ 53,731 $ 27,500 Borrowing capacity (c) $ 516,269 $ 405,965 (a) See Note 11 , Fair Value, for more information regarding the Company’s 2016 Credit Agreement and notes outstanding. (b) Collateral for lease agreements, virtual card and fuel payment processing activity at the Company’s foreign subsidiaries (c) Contingent on maintaining compliance with the financial covenants as defined in the Company’s 2016 Credit Agreement 2016 Credit Agreement The 2016 Credit Agreement provides for tranche A and tranche B term loan facilities in amounts equal to $455.0 million and $1,335.0 million respectively, and a $570.0 million secured revolving credit facility, with a sublimit for letters of credit and swingline loans. Under the 2016 Credit Agreement, amounts due under the revolving credit facility and the tranche A term loan facility mature in July 2021, while amounts due under the tranche B term loan facility mature in July 2023. Prior to maturity, amounts borrowed under the credit facility will be reduced by mandatory quarterly payments of $5.7 million and $3.4 million for tranche A and tranche B term loan facilities, respectively. On January 17, 2018, the Company repriced the secured term loans under the 2016 Credit Agreement, which reduced the applicable interest rate margin for the Company’s tranche B term loan facility by 50 basis points for both Eurocurrency Rate (as defined in the 2016 Credit Agreement) borrowings and base rate borrowings and increased the outstanding amounts on these tranche B term loans from $1,182.0 million to $1,335.0 million . In addition, the repricing made certain other changes to the 2016 Credit Agreement, including increasing the maximum consolidated leverage ratio for both the period of December 31, 2018 through September 30, 2019, and upon the occurrence of an acquisition meeting certain specified criteria, permitting the incurrence of unsecured indebtedness as long as the Company is in pro forma compliance with the financial covenants, resetting the six month soft call period for a repricing of the tranche B term loans and resetting and amending the test for incremental loans. Following the repricing, the applicable interest rate margin for the tranche B term loans was set at 2.25% for Eurocurrency borrowings and 1.25% for base rate borrowings. As of June 30, 2018, amounts outstanding under the 2016 Credit Agreement bore interest at a rate equal to the Eurocurrency Rate plus a margin of 2.00% with respect to the tranche A term loan facility, and 2.25% with respect to the tranche B term loan facility (with the Eurocurrency Rate subject to a 0.00% floor). As of June 30, 2018 and December 31, 2017 , amounts outstanding under the 2016 Credit Agreement bore a weighted average effective interest rate of 4.4 percent and 4.2 percent , respectively. The Company accounted for the January 2018 repricing as both a debt extinguishment and debt modification by evaluating the refinancing on a creditor by creditor basis. During the first quarter of 2018, the Company recorded a loss on extinguishment of debt of $1.1 million related to the write-off of unamortized debt issuance costs and incurred general and administrative expenses of $3.0 million related to third-party costs associated with the modified debt. The loss on extinguishment and third-party costs are reflected as financing interest expense and service fees, respectively, within our unaudited condensed consolidated statements of income. In addition, the Company incurred and capitalized $2.9 million of new debt issuance costs related to the repricing. The Company maintains interest rate swap agreements to manage the interest rate risk associated with its outstanding variable-interest rate borrowings under the 2016 Credit Agreement. See Note 7 , Derivative Instruments, for further discussion. Debt Covenants As more fully described in the Company’s Annual Report on Form 10–K for the year ended December 31, 2017 , the 2016 Credit Agreement and the Indenture contain covenants that limit the ability of the Company and its subsidiaries, including its restricted subsidiaries and, in certain limited circumstances, WEX Bank and the Company’s other regulated subsidiaries, to (i) incur additional debt, (ii) pay dividends or make other distributions on, redeem or repurchase capital stock, or make investments or other restricted payments, (iii) enter into transactions with affiliates, (iv) dispose of assets or issue stock of restricted subsidiaries or regulated subsidiaries, (v) create liens on assets, or (vi) effect a consolidation or merger or sell all, or substantially all, of the Company’s assets. As of June 30, 2018 , the Company was in compliance with all material covenants of its 2016 Credit Agreement and the Indenture. Notes Outstanding As of both June 30, 2018 and December 31, 2017 , the Company had $400.0 million of 4.75% fixed-rate senior notes outstanding, which will mature on February 1, 2023. Interest is payable semiannually in arrears on February 1 and August 1 of each year, commencing on August 1, 2013. Australian Securitization Facility The Company has entered into a one year securitized debt agreement with the Bank of Tokyo-Mitsubishi UFJ, Ltd expiring April 2019. Under the terms of the agreement, each month, on a revolving basis, the Company sells certain of its Australian receivables to the Company’s Australian Securitization Subsidiary. The Australian Securitization Subsidiary, in turn, uses the receivables as collateral to issue asset-backed commercial paper (“securitized debt”) for approximately 85 percent of the securitized receivables. The amount collected on the securitized receivables is restricted to pay the securitized debt and is not available for general corporate purposes. The Company pays a variable interest rate on the outstanding balance of the securitized debt, based on the Australian Bank Bill Rate plus an applicable margin. The interest rate was 2.87% and 2.53% as of June 30, 2018 and December 31, 2017 , respectively. The Company had $91.1 million and $90.0 million of securitized debt under this facility as of June 30, 2018 and December 31, 2017 , respectively. WEX Latin America Securitization Facility During the second quarter of 2017, WEX Latin America entered into a securitized debt agreement to sell certain unsecured receivables associated with our salary payment card product to an investment fund managed by an unrelated third-party financial institution. Under the terms of the agreement, the investment fund’s purchase price incorporates a discount relative to the face value of the transferred receivables. This securitization arrangement does not meet the derecognition conditions and accordingly WEX Latin America continues to report the transferred receivables in our unaudited condensed consolidated balance sheets with no change in the basis of accounting. Additionally, we recognize the cash proceeds received from the investment fund and record offsetting securitized debt in our unaudited condensed consolidated balance sheets. During the six months ended June 30, 2018 , WEX Latin America paid $2.6 million in exchange for a non-controlling equity investment in the securitization facility. This equity investment is recorded within other assets in our unaudited condensed consolidated balance sheets. The Company had $30.1 million and $19.0 million of securitized debt under this facility as of June 30, 2018 and December 31, 2017, respectively. During the three and six months ended June 30, 2018 , the Company recognized approximately $2.3 million and $4.4 million , respectively, of operating interest under this financing arrangement. Operating interest for the three and six months ended June 30, 2017 was immaterial. European Securitization Facility On April 7, 2016, the Company entered into a five -year securitized debt agreement with the Bank of Tokyo-Mitsubishi UFJ, Ltd. Under the terms of the agreement, the Company sells certain of its receivables from selected European countries to its European Securitization Subsidiary. The European Securitization Subsidiary, in turn, uses the receivables as collateral to issue securitized debt. The amount collected on the securitized receivables is restricted to pay the securitized debt and is not available for general corporate purposes. The amounts of receivables to be securitized under this agreement will be determined by management on a monthly basis. The interest rate was 1.14 percent and 1.11 percent as of June 30, 2018 and December 31, 2017 , respectively. The Company had $23.3 million and $17.9 million of securitized debt under this facility as of June 30, 2018 and December 31, 2017 , respectively. Participation Debt Historically, WEX Bank maintained three separate participation agreements with third-party banks to fund customer balances that exceeded WEX Bank’s lending limit to an individual customer. In June 2018, WEX Bank entered into a fourth participation agreement with a third-party bank to fund an additional customer’s balance. Associated unsecured borrowings carry a variable interest rate of 1 month to 3 month LIBOR plus a margin of 225 basis points. The balance of the debt was approximately $204.5 million and $185.0 million at June 30, 2018 and December 31, 2017 , respectively. The outstanding commitment as of June 30, 2018 will mature in amounts of $85.0 million and $50.0 million on August 28, 2018 and August 31, 2020, respectively, with the remaining $69.5 million maturing on demand. Borrowed Federal Funds WEX Bank borrows from lines of credit on a federal funds rate basis to supplement the financing of its accounts receivable. There were $44.0 million of borrowings against these lines of credit as of June 30, 2018 bearing interest at 2.13% and no outstanding borrowings as of December 31, 2017 . As of June 30, 2018 , the Company’s federal funds available lines of credit was $106.0 million . WEX Latin America Debt WEX Latin America had debt of approximately $7.9 million and $9.7 million as of June 30, 2018 and December 31, 2017 , respectively. This is comprised of credit facilities and loan arrangements related to our accounts receivable. The average interest rate was 16.9 percent and 21.2 percent as of June 30, 2018 and December 31, 2017 , respectively. These borrowings are recorded in short-term debt, net on the Company’s unaudited condensed consolidated balance sheets for the periods presented. |
Off-Balance Sheet Arrangement
Off-Balance Sheet Arrangement | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Off-Balance Sheet Arrangement | 10. Off–Balance Sheet Arrangement WEX Europe Services Accounts Receivable Factoring During the first quarter of 2017, WEX Europe Services entered into a factoring arrangement with an unrelated third-party financial institution (the “Purchasing Bank.”) Under this arrangement, the Purchasing Bank establishes a credit limit for each customer account. The factored receivables are without recourse to the extent that the customer balances are maintained at or below the established credit limit. For customer receivable balances in excess of the Purchasing Bank’s credit limit, the Company maintains the risk of default. Additionally, there are no indications of the Company’s continuing involvement in the factored receivables. The Company obtained a true sale opinion from an independent attorney, which states that the factoring agreement provides legal isolation upon seller bankruptcy or receivership under local law and creates a sale of receivables for amounts transferred both below and above the established credit limits. As such, transfers under this arrangement are treated as sales and are accounted for as reductions in trade receivables because the agreements transfer effective control of the receivables to the Purchasing Bank. The Company records the proceeds as cash provided by operating activities. The Company sold approximately $190.7 million and $360.9 million of receivables under this arrangement during the three and six months ended June 30, 2018 , respectively. Proceeds received are recorded net of applicable expenses, interest and commissions. The loss on factoring was $1.2 million and $2.3 million for the three and six months ended June 30, 2018 , respectively, and immaterial for the three and six months ended June 30, 2017 , and was recorded within cost of services in the unaudited condensed consolidated statements of income. As of June 30, 2018 and December 31, 2017, the Company had associated factoring receivables of approximately $75.4 million and $61.8 million , respectively, of which approximately $4.6 million and $3.7 million , respectively, were in excess of the established credit limit. Charge-backs on balances in excess of the credit limit during the three and six months ended June 30, 2018 were insignificant. There were no charge-backs on balances in excess of the credit limit during the three and six months ended June 30, 2017. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 11. Fair Value The Company holds mortgage-backed securities, fixed-income securities, derivatives (see Note 7 , Derivative Instruments) and certain other financial instruments that are carried at fair value. The Company determines fair value based upon quoted prices when available or through the use of alternative approaches, such as model pricing, when market quotes are not readily accessible or available. Various factors are considered in determining the fair value of the Company’s obligations, including: closing exchange or over-the-counter market price quotations; time value and volatility factors underlying options and derivatives; price activity for equivalent instruments; and the Company’s own credit standing. These valuation techniques may be based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 – Instruments whose significant value drivers are unobservable. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. We did not have any transfers between Level 1 and Level 2 of the fair value hierarchy during either of the three and six months ended June 30, 2018 or June 30, 2017 . The following table presents the Company’s assets and liabilities that are measured at fair value and the related hierarchy levels: (In thousands) Fair Value Hierarchy June 30, 2018 December 31, 2017 Assets Municipal bonds 2 $ 469 $ 534 Asset-backed securities 2 328 345 Mortgage-backed securities 2 279 305 Fixed-income mutual fund 1 21,894 22,174 Investment securities (a) $ 22,970 $ 23,358 Executive deferred compensation plan trust (b) 1 $ 6,946 $ 6,798 Interest rate swaps (c) 2 $ 31,674 $ 19,595 Liabilities Interest rate swaps (d) 2 $ — $ 5,373 (a) Not deemed available for current operations and have been classified as long-term assets. (b) The fair value of these instruments is recorded in other assets. (c) The fair value of these instruments is recorded in prepaid expenses and other current assets or other assets depending on the timing of expected discounted cash flows. (d) The fair value of these instruments is recorded in other current liabilities based on the timing of expected discounted cash flows. Investment Securities When available, the Company uses quoted market prices to determine the fair value of investment securities; such inputs are classified as Level 1 of the fair-value hierarchy. These securities primarily consist of an open-ended mutual fund which is invested in fixed-income securities and is held in order to satisfy the regulatory requirements of WEX Bank. For mortgage-backed and asset-backed debt securities and municipal bonds, the Company generally uses quoted prices for recent trading activity of assets with similar characteristics to the debt security or bond being valued. The securities and bonds priced using such methods are generally valued using Level 2 inputs. Executive Deferred Compensation Plan Trust The obligations related to the deferred compensation plan trust are classified as Level 1 in the fair value hierarchy because the fair value is determined using quoted prices for identical instruments in active markets. Interest Rate Swaps The Company determines the fair value of its interest rate swaps based on the discounted cash flows of the difference between the projected fixed payments on the swaps and the implied floating payments using the current LIBOR curve, which are Level 2 inputs of the fair value hierarchy. Notes Outstanding The Notes outstanding had a fair value of $402.0 million and $410.0 million as of June 30, 2018 and December 31, 2017 , respectively. The fair value of the Notes is based on market rates for the issuance of our debt and is classified as Level 2 in the fair value hierarchy. 2016 Credit Agreement The Company determines the fair value of the amount outstanding under its 2016 Credit Agreement based on the market rates for the issuance of the Company’s debt, which are Level 2 inputs in the fair value hierarchy. As of both June 30, 2018 and December 31, 2017 , the carrying value of the 2016 Credit Agreement approximated its fair value. Other Assets and Liabilities The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other liabilities approximate their respective fair values due to the short-term nature of such instruments. The carrying values of certificates of deposit, interest-bearing money market deposits, securitized debt, participation debt and borrowed federal funds approximate their respective fair values as the interest rates on these financial instruments are variable market-based rates. All other financial instruments are reflected at fair value on the unaudited condensed consolidated balance sheets. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The Company’s effective tax rate was 26.1 percent and 25.0 percent for the second quarter and first half of 2018 , respectively, as compared to 39.0 percent and 35.5 percent for the second quarter and first half of 2017, respectively. The decline in our tax rate was primarily due to the 2017 Tax Act, which reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. During the fourth quarter of 2017, the Company recorded a provisional amount of one-time income tax benefit of $60.6 million associated with the 2017 Tax Act and it has not changed at June 30, 2018 . This estimate may be impacted by further analysis and future clarification and guidance regarding available tax accounting methods and elections, earnings and profits computations and state tax conformity to federal tax changes. As of June 30, 2018 , we are still evaluating the effects of the Global Intangible Low Taxed Income (“GILTI”) provisions as guidance and interpretations continue to emerge. However, we do not expect the impact to be material to our financial statements. We have not determined the accounting policy of either treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred, or factoring such amounts into the Company’s measurement of its deferred taxes. However, the standard requires that we reflect the impact of the GILTI provisions as a period expense until the accounting policy is finalized. Therefore, we have included the provisional estimate of GILTI related to current year operations in our estimated annual effective tax rate and will update the impact and accounting policy as the analysis related to the GILTI provisions is completed. Undistributed earnings and profits of certain foreign subsidiaries of the Company amounted to $76.6 million and $58.7 million at June 30, 2018 and December 31, 2017 , respectively. These earnings and profits are considered to be indefinitely reinvested. The 2017 Tax Act imposes a one-time “transition tax” on foreign undistributed earnings and profits, which will be included with our 2017 U.S. Income Tax Return. At December 31, 2017, the Company estimated the transition tax and recorded a provisional transition tax obligation of $9.1 million . However, the Company is continuing to gather additional information to more precisely compute the amount of the transition tax and our provisional estimate could change. The Company intends to offset the “transition tax” liability with tax attributes. For the period ending June 30, 2018 , except for GILTI, as indicated above, the Company did not record United States federal income tax on its share of the income of its foreign subsidiaries. Upon distribution of these earnings and profits in the form of dividends or otherwise, the Company would be subject to withholding taxes payable to foreign countries, where applicable, and to certain state income taxes, but would have no further federal income tax liability. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Litigation The Company is subject to legal proceedings and claims in the ordinary course of business. As of the date of this filing, the current estimate of a reasonably possible loss contingency from all legal proceedings is not material to the Company’s consolidated financial position, results of operations, cash flows or liquidity. Commitments Significant commitments and contingencies as of June 30, 2018 are consistent with those discussed in Note 18, Commitments and Contingencies, to the consolidated financial statements in the Annual Report on Form 10–K for the year ended December 31, 2017 . |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 14. Stock–Based Compensation The fair value of restricted stock units (“RSUs”), deferred stock units (“DSUs”), performance-based restricted stock units (“PBRSUs”), service-based stock options and market performance-based stock options awarded during the three and six months ended June 30, 2018 totaled $2.7 million and $30.1 million , respectively, as compared to $17.2 million and $45.3 million , respectively, for the three and six months ended June 30, 2017 . Grant activity during the three and six months ended June 30, 2017 includes certain market performance-based stock options awarded to members of senior management. The fair value of RSUs, DSUs and PBRSUs is based on the closing market price of the Company’s stock on the grant date as reported by the NYSE. The fair value of each service-based stock option award is estimated on the grant date using a Black-Scholes-Merton option-pricing model. During the first half of 2017, we granted performance-based stock options for which we estimated the grant date fair value using a Monte-Carlo simulation model that simulated a distribution of future stock price paths based on historical volatility levels. The table below summarizes the assumptions used to calculate the fair value of service-based options by year of grant: 2018 2017 Weighted average expected life (in years) 6.0 6.0 Weighted average exercise price $ 158.23 $ 104.95 Expected stock price volatility 27.35 % 30.67 % Risk-free interest rate 2.69 % 2.13 % Weighted average fair value $ 51.27 $ 35.58 |
Restructuring Activities
Restructuring Activities | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | 15. Restructuring Activities Restructuring In the first quarter of 2015, the Company commenced a restructuring initiative (the “2015 Restructuring Initiative”) as a result of its global review of operations. The review of operations identified certain initiatives to further streamline the business, improve the Company’s efficiency and globalize the Company’s operations, all with an objective to improve scale and increase profitability going forward. The Company continued its efforts to improve its overall operational efficiency and began a second restructuring initiative (the “2016 Restructuring Initiative”) during the second quarter of 2016. In connection with the EFS acquisition, the Company initiated a third restructuring program in the third quarter of 2016 (the “Acquisition Integration Restructuring Initiative”). The restructuring expenses related to these initiatives primarily consist of employee costs and office closure costs directly associated with the respective programs. The Company has determined the amount of expenses related to these initiatives is probable and reasonably estimable. As such, the Company has recorded the impact on the unaudited condensed consolidated statements of income and in accrued expenses and current liabilities on the unaudited condensed consolidated balance sheets. Restructuring charges incurred to date under these initiatives were $24.7 million as of June 30, 2018 . The majority of the balances under these initiatives are expected to be paid through 2018. Based on current plans, which are subject to change, the amount of additional restructuring costs that the Company expects to incur under these initiatives is immaterial. The following table presents the Company’s 2015 Restructuring Initiative liability: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Balance, beginning of period $ 2,337 $ 5,231 $ 2,680 $ 5,231 Restructuring (reversals) charges (33 ) 1,223 (47 ) 1,533 Cash paid (1,082 ) (2,488 ) (1,491 ) (2,836 ) Liability transfer to 2016 Restructuring Initiative — (1,158 ) — (1,158 ) Impact of foreign currency translation (79 ) 200 1 238 Balance, end of period $ 1,143 $ 3,008 $ 1,143 $ 3,008 The following table presents the Company’s 2016 Restructuring Initiative liability: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Balance, beginning of period $ 438 $ 3,202 $ 738 $ 3,662 Restructuring charges 34 219 30 (314 ) Cash paid (41 ) (487 ) (356 ) (487 ) Liability transfer from 2015 Restructuring Initiative — 1,158 — 1,158 Impact of foreign currency translation (21 ) 250 (2 ) 323 Balance, end of period $ 410 $ 4,342 $ 410 $ 4,342 The following table presents the Company’s Acquisition Integration Restructuring Initiative liability: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Balance, beginning of period $ 201 $ 2,139 $ 5,093 $ 1,764 Restructuring charges 54 234 239 941 Cash paid (222 ) (889 ) (5,323 ) (1,479 ) Other — (151 ) 22 107 Impact of foreign currency translation (1 ) — 1 — Balance, end of period $ 32 $ 1,333 $ 32 $ 1,333 The following table presents the Company’s total restructuring liability: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Balance, beginning of period $ 2,976 $ 10,572 $ 8,511 $ 10,657 Restructuring charges 55 1,676 222 2,160 Cash paid (1,345 ) (3,864 ) (7,170 ) (4,802 ) Other — (151 ) 22 107 Impact of foreign currency translation (101 ) 450 — 561 Balance, end of period $ 1,585 $ 8,683 $ 1,585 $ 8,683 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 16. Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s CODM is its Chief Executive Officer. The operating segments are aggregated into the three reportable segments described below. • Fleet Solutions provides customers with payment and transaction processing services specifically designed for the needs of commercial and government fleets. This segment also provides information management services to these fleet customers. • Travel and Corporate Solutions focuses on the complex payment environment of business-to-business payments, providing customers with payment processing solutions for their corporate payment and transaction monitoring needs. • Health and Employee Benefit Solutions provides healthcare payment products and SaaS consumer directed platforms, as well as payroll related benefits to customers. The following tables present the Company’s reportable segment results: Three Months Ended June 30, 2018 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Revenues Payment processing revenue $ 112,895 $ 51,289 $ 14,554 $ 178,738 Account servicing revenue 43,019 8,995 26,702 78,716 Finance fee revenue 45,188 228 6,157 51,573 Other revenue 40,368 15,252 6,229 61,849 Total revenues $ 241,470 $ 75,764 $ 53,642 $ 370,876 Interest income $ 1,040 $ 122 $ 6,321 $ 7,483 Three Months Ended June 30, 2017 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Revenues Payment processing revenue $ 87,678 $ 40,276 $ 13,400 $ 141,354 Account servicing revenue 41,311 167 24,199 65,677 Finance fee revenue 36,552 159 5,374 42,085 Other revenue 34,763 14,398 5,607 54,768 Total revenues $ 200,304 $ 55,000 $ 48,580 $ 303,884 Interest income $ 696 $ 315 $ 5,495 $ 6,506 Six Months Ended June 30, 2018 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Revenues Payment processing revenue $ 219,873 $ 96,066 $ 31,253 $ 347,192 Account servicing revenue 85,229 18,464 53,727 157,420 Finance fee revenue 88,792 487 11,976 101,255 Other revenue 77,941 27,526 14,371 119,838 Total revenues $ 471,835 $ 142,543 $ 111,327 $ 725,705 Interest income $ 2,035 $ 543 $ 13,089 $ 15,667 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 In evaluating the financial performance of each segment, the CODM reviews segment adjusted operating income, which excludes: (i) acquisition and divestiture related items (including acquisition-related intangible amortization); (ii) debt restructuring costs; (iii) stock-based compensation; (iv) restructuring and other costs; and (v) certain impairment charges. Additionally, we do not allocate foreign currency gains and losses, financing interest expense, unrealized and realized gains and losses on derivative instruments, income taxes and net gains or losses from non-controlling interest to our operating segments. Effective January 1, 2018, the Company revised how it allocates certain costs in its measure of segment adjusted operating income. The primary change is how the Company allocates information technology and corporate related costs to its segments. Certain information technology and corporate related costs that support multiple segments, which were previously included in Fleet Solutions, are now being allocated to the segment that they support. Certain residual unallocated corporate costs represent the portion of expenses relating to general corporate functions including acquisition expenses, certain finance, legal, information technology, human resources, administrative, executive and other expenses. These expenses are recorded in unallocated corporate expenses, as these items are centrally and directly controlled and are not included in internal measures of segment operating performance. Segment results for the three and six months ended June 30, 2017 have been recast to conform to the current presentation as described above. The following table reconciles segment adjusted operating income to income before income taxes: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Segment adjusted operating income Fleet Solutions $ 113,725 $ 91,037 $ 215,633 $ 175,020 Travel and Corporate Solutions 34,448 21,516 59,697 40,702 Health and Employee Benefit Solutions 13,323 12,191 31,962 30,390 Total segment adjusted operating income $ 161,496 $ 124,744 $ 307,292 $ 246,112 Reconciliation: Total segment adjusted operating income $ 161,496 $ 124,744 $ 307,292 $ 246,112 Less: Unallocated corporate expenses 15,044 12,823 28,964 25,121 Acquisition-related intangible amortization 34,921 38,114 70,157 76,093 Other acquisition and divestiture related items 619 239 1,256 2,374 Debt restructuring costs 466 — 3,481 — Stock-based compensation 6,905 7,414 15,860 13,871 Restructuring and other costs 630 2,398 6,301 4,145 Impairment charge — 16,175 — 16,175 Operating income 102,911 47,581 181,273 108,333 Financing interest expense (25,505 ) (28,547 ) (52,842 ) (55,695 ) Net foreign currency (loss) gain (26,734 ) 10,525 (26,344 ) 18,967 Net unrealized gain (loss) on financial instruments 2,706 (2,264 ) 16,214 (699 ) Income before income taxes $ 53,378 $ 27,295 $ 118,301 $ 70,906 |
Supplementary Regulatory Capita
Supplementary Regulatory Capital Disclosure | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Supplementary Regulatory Capital Disclosure | 17. Supplementary Regulatory Capital Disclosure The Company’s subsidiary, WEX Bank, is subject to various regulatory capital requirements administered by the FDIC and the Utah Department of Financial Institutions. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, WEX Bank must meet specific capital guidelines that involve quantitative measures of WEX Bank’s assets, liabilities and certain off-balance sheet items. WEX Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Failure to meet minimum capital requirements can result in the initiation of certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could limit our business activities and have a material adverse effect on our business, results of operations and financial condition. As of June 30, 2018 and December 31, 2017, WEX Bank met all the requirements to be deemed “well-capitalized” pursuant to FDIC regulation and for purposes of the Federal Deposit Insurance Act. WEX Bank’s actual and regulatory minimum capital amounts and ratios are presented in the following table: (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 $ 334,555 12.09 % $ 221,347 8.0 % $ 276,683 10.0 % Tier 1 Capital to average assets $ 321,557 11.56 % $ 111,265 4.0 % $ 139,082 5.0 % Common equity to risk-weighted assets $ 321,557 11.62 % $ 124,507 4.5 % $ 179,844 6.5 % Tier 1 Capital to risk-weighted assets $ 321,557 11.62 % $ 166,010 6.0 % $ 221,347 8.0 % December 31, 2017 Total Capital to risk-weighted assets $ 316,129 13.38 % $ 188,991 8.0 % $ 236,239 10.0 % Tier 1 Capital to average assets $ 304,555 12.50 % $ 97,452 4.0 % $ 121,815 5.0 % Common equity to risk-weighted assets $ 304,555 12.89 % $ 106,308 4.5 % $ 153,555 6.5 % Tier 1 Capital to risk-weighted assets $ 304,555 12.89 % $ 141,743 6.0 % $ 188,991 8.0 % |
Recent Accounting Pronounceme27
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10–Q and Rule 10–01 of Regulation S–X. Accordingly, they do not include all information and notes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements that are included in the Company’s Annual Report on Form 10–K for the year ended December 31, 2017 , filed with the SEC on March 1, 2018 . In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results for any future periods or the year ending December 31, 2018 . The Company rounds amounts in the unaudited condensed consolidated financial statements to thousands and calculates all per-share data from underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot or recalculate based on reported numbers due to rounding. |
New Accounting Standards | 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. 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. 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 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. |
Receivables | In general, the Company’s trade receivables provide for payment terms of 30 days or less. Receivables not paid within the terms of the agreement are generally subject to late fees based upon the outstanding receivable balance. The Company extends revolving credit to certain small 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. |
Earnings per Share | Basic earnings per share is computed by dividing net 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 average unrecognized compensation expense for unvested share-based compensation awards, would be used to purchase the Company’s common stock at the average market price during the period. |
Derivative Instruments | The Company is exposed to certain market risks relating to its ongoing business operations. From time to time, the Company enters into derivative instrument arrangements to manage various risks including interest rate risk, foreign exchange risk and commodity price risk. |
Fair Value of Financial Instruments | Investment Securities When available, the Company uses quoted market prices to determine the fair value of investment securities; such inputs are classified as Level 1 of the fair-value hierarchy. These securities primarily consist of an open-ended mutual fund which is invested in fixed-income securities and is held in order to satisfy the regulatory requirements of WEX Bank. For mortgage-backed and asset-backed debt securities and municipal bonds, the Company generally uses quoted prices for recent trading activity of assets with similar characteristics to the debt security or bond being valued. The securities and bonds priced using such methods are generally valued using Level 2 inputs. Executive Deferred Compensation Plan Trust The obligations related to the deferred compensation plan trust are classified as Level 1 in the fair value hierarchy because the fair value is determined using quoted prices for identical instruments in active markets. Interest Rate Swaps The Company determines the fair value of its interest rate swaps based on the discounted cash flows of the difference between the projected fixed payments on the swaps and the implied floating payments using the current LIBOR curve, which are Level 2 inputs of the fair value hierarchy. 2016 Credit Agreement The Company determines the fair value of the amount outstanding under its 2016 Credit Agreement based on the market rates for the issuance of the Company’s debt, which are Level 2 inputs in the fair value hierarchy. The fair value of the Notes is based on market rates for the issuance of our debt and is classified as Level 2 in the fair value hierarchy. The Company holds mortgage-backed securities, fixed-income securities, derivatives (see Note 7 , Derivative Instruments) and certain other financial instruments that are carried at fair value. The Company determines fair value based upon quoted prices when available or through the use of alternative approaches, such as model pricing, when market quotes are not readily accessible or available. Various factors are considered in determining the fair value of the Company’s obligations, including: closing exchange or over-the-counter market price quotations; time value and volatility factors underlying options and derivatives; price activity for equivalent instruments; and the Company’s own credit standing. These valuation techniques may be based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 – Instruments whose significant value drivers are unobservable. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. |
Segment Information | Operating segments are defined as components of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s CODM is its Chief Executive Officer. The operating segments are aggregated into the three reportable segments described below. • Fleet Solutions provides customers with payment and transaction processing services specifically designed for the needs of commercial and government fleets. This segment also provides information management services to these fleet customers. • Travel and Corporate Solutions focuses on the complex payment environment of business-to-business payments, providing customers with payment processing solutions for their corporate payment and transaction monitoring needs. • Health and Employee Benefit Solutions provides healthcare payment products and SaaS consumer directed platforms, as well as payroll related benefits to customers. |
Recent Accounting Pronounceme28
Recent Accounting Pronouncements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | 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. 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. 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 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. 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 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | 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. 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. 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 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. 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 |
Summary of Disaggregation of Revenue | 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 |
Summary of Contract Assets and Liabilities | 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 Receivables 1 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 1 The majority of the Company’s receivables, excluded from the table above, are either due from cardholders, who have not been deemed our customer as it relates to interchange income, or from revenues earned outside of the scope of ASC Topic 606. |
Schedule of Remaining Performance Obligations | 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 fees 1 $ 30,803 $ 52,182 $ 32,160 $ 16,699 $ 7,394 $ 683 $ 139,921 Professional services 2 9,691 4,183 — — — — 13,874 Total remaining performance obligations $ 40,494 $ 56,365 $ 32,160 $ 16,699 $ 7,394 $ 683 $ 153,795 1 The transaction price allocated to the remaining performance obligations represents the minimum monthly fees on certain service contracts, which contain substantive termination penalties that require the 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 services sold subsequent to the core offerings, to which the customer is contractually obligated. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The following is a summary of the preliminary allocation of the purchase price to the assets and liabilities acquired: (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) Weighted average life – 9.0 years . (b) Weighted average life – 3.4 years . (c) Weighted average life – 4.3 years . (a) (b) (c) The weighted average life of these amortized intangible assets is 5.5 years . |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Past Due Financing Receivables | The following table presents the 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: Delinquency Status June 30, 2018 December 31, 2017 29 days or less past due 98 % 95 % 59 days or less past due 99 % 97 % |
Changes in Reserves for Credit Losses Related to Accounts Receivable | 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 accounts 1 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 1 The 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. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Income and Share Data Used in Basic and Diluted Earnings Per Share Computations | The following table summarizes net income attributable to shareholders and reconciles basic and diluted shares outstanding used in the earnings per share computations: Three Months Ended June 30, Six Months Ended June 30, (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 43,181 43,002 43,116 42,937 Dilutive impact of share-based compensation awards 365 58 408 153 Weighted average common shares outstanding – Diluted 43,546 43,060 43,524 43,090 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The notional amounts, fixed and variable interest rates and maturities of the interest rate swap agreements are as follows: Tranche A Tranche B Tranche C Tranche D Tranche E Notional amount at inception (in thousands) $300,000 $200,000 $400,000 $150,000 $250,000 Amortization N/A N/A 5% annually N/A N/A Maturity date 12/30/2022 12/30/2022 12/31/2020 12/31/2020 12/31/2018 Fixed interest rate 2.204% 2.212% 1.108% 1.125% 0.896% |
Location and Amounts of Derivative Gains and Losses in Condensed Consolidated Statements of Income | The following table presents information on the location and amounts of interest rate swap gains and losses: (In thousands) Three Months Ended June 30, Six Months Ended June 30, Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income Statement 2018 2017 2018 2017 Interest rate swap agreements – unrealized portion Net unrealized gain (loss) on financial instruments $ 3,944 $ (2,264 ) $ 17,452 $ (699 ) Interest rate swap agreements – realized portion Financing interest income (expense) $ 1,363 $ (77 ) $ 1,676 $ (620 ) |
Deposits (Tables)
Deposits (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Banking and Thrift [Abstract] | |
Schedule of Deposits | The following table presents the composition of deposits: (In thousands) June 30, 2018 December 31, 2017 Interest-bearing brokered money market deposits $ 317,685 $ 285,899 Customer deposits 77,000 70,211 Certificates of deposit with maturities within 1 year (a) 433,558 630,879 Short-term deposits 828,243 986,989 Certificates of deposit with maturities greater than 1 year and less than 5 years (a) 326,303 306,865 Total deposits $ 1,154,546 $ 1,293,854 Weighted average cost of funds on certificates of deposit outstanding 1.85 % 1.51 % Weighted average cost of interest-bearing brokered money market deposits 2.12 % 1.49 % (a) Certificates of deposit are classified as short-term or long-term within our unaudited condensed consolidated balance sheets based on maturity date. |
Financing and Other Debt (Table
Financing and Other Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following table summarizes the Company’s total outstanding debt: (In thousands) June 30, 2018 December 31, 2017 Revolving line-of-credit facility under 2016 Credit Agreement (a) $ — $ 136,535 Term loans under 2016 Credit Agreement (a) 1,737,723 1,602,875 Notes outstanding (a) 400,000 400,000 Securitized debt 144,533 126,901 Participation debt 204,493 184,990 Borrowed federal funds 44,000 — WEX Latin America debt 7,889 9,747 Total gross debt $ 2,538,638 $ 2,461,048 Current portion of gross debt $ 387,228 $ 404,233 Less: Unamortized debt issuance costs (7,690 ) (7,015 ) Short-term debt, net $ 379,538 $ 397,218 Long-term gross debt $ 2,151,410 $ 2,056,815 Less: Unamortized debt issuance costs (26,301 ) (29,063 ) Long-term debt, net $ 2,125,109 $ 2,027,752 Supplemental information under 2016 Credit Agreement: Letters of credit (b) $ 53,731 $ 27,500 Borrowing capacity (c) $ 516,269 $ 405,965 (a) See Note 11 , Fair Value, for more information regarding the Company’s 2016 Credit Agreement and notes outstanding. (b) Collateral for lease agreements, virtual card and fuel payment processing activity at the Company’s foreign subsidiaries (c) Contingent on maintaining compliance with the financial covenants as defined in the Company’s 2016 Credit Agreement |
Fair Value Fair Value (Tables)
Fair Value Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value | The following table presents the Company’s assets and liabilities that are measured at fair value and the related hierarchy levels: (In thousands) Fair Value Hierarchy June 30, 2018 December 31, 2017 Assets Municipal bonds 2 $ 469 $ 534 Asset-backed securities 2 328 345 Mortgage-backed securities 2 279 305 Fixed-income mutual fund 1 21,894 22,174 Investment securities (a) $ 22,970 $ 23,358 Executive deferred compensation plan trust (b) 1 $ 6,946 $ 6,798 Interest rate swaps (c) 2 $ 31,674 $ 19,595 Liabilities Interest rate swaps (d) 2 $ — $ 5,373 (a) Not deemed available for current operations and have been classified as long-term assets. (b) The fair value of these instruments is recorded in other assets. (c) The fair value of these instruments is recorded in prepaid expenses and other current assets or other assets depending on the timing of expected discounted cash flows. (d) The fair value of these instruments is recorded in other current liabilities based on the timing of expected discounted cash flows. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Assumptions Used | The table below summarizes the assumptions used to calculate the fair value of service-based options by year of grant: 2018 2017 Weighted average expected life (in years) 6.0 6.0 Weighted average exercise price $ 158.23 $ 104.95 Expected stock price volatility 27.35 % 30.67 % Risk-free interest rate 2.69 % 2.13 % Weighted average fair value $ 51.27 $ 35.58 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table presents the Company’s 2015 Restructuring Initiative liability: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Balance, beginning of period $ 2,337 $ 5,231 $ 2,680 $ 5,231 Restructuring (reversals) charges (33 ) 1,223 (47 ) 1,533 Cash paid (1,082 ) (2,488 ) (1,491 ) (2,836 ) Liability transfer to 2016 Restructuring Initiative — (1,158 ) — (1,158 ) Impact of foreign currency translation (79 ) 200 1 238 Balance, end of period $ 1,143 $ 3,008 $ 1,143 $ 3,008 The following table presents the Company’s 2016 Restructuring Initiative liability: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Balance, beginning of period $ 438 $ 3,202 $ 738 $ 3,662 Restructuring charges 34 219 30 (314 ) Cash paid (41 ) (487 ) (356 ) (487 ) Liability transfer from 2015 Restructuring Initiative — 1,158 — 1,158 Impact of foreign currency translation (21 ) 250 (2 ) 323 Balance, end of period $ 410 $ 4,342 $ 410 $ 4,342 The following table presents the Company’s Acquisition Integration Restructuring Initiative liability: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Balance, beginning of period $ 201 $ 2,139 $ 5,093 $ 1,764 Restructuring charges 54 234 239 941 Cash paid (222 ) (889 ) (5,323 ) (1,479 ) Other — (151 ) 22 107 Impact of foreign currency translation (1 ) — 1 — Balance, end of period $ 32 $ 1,333 $ 32 $ 1,333 The following table presents the Company’s total restructuring liability: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Balance, beginning of period $ 2,976 $ 10,572 $ 8,511 $ 10,657 Restructuring charges 55 1,676 222 2,160 Cash paid (1,345 ) (3,864 ) (7,170 ) (4,802 ) Other — (151 ) 22 107 Impact of foreign currency translation (101 ) 450 — 561 Balance, end of period $ 1,585 $ 8,683 $ 1,585 $ 8,683 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Results | The following tables present the Company’s reportable segment results: Three Months Ended June 30, 2018 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Revenues Payment processing revenue $ 112,895 $ 51,289 $ 14,554 $ 178,738 Account servicing revenue 43,019 8,995 26,702 78,716 Finance fee revenue 45,188 228 6,157 51,573 Other revenue 40,368 15,252 6,229 61,849 Total revenues $ 241,470 $ 75,764 $ 53,642 $ 370,876 Interest income $ 1,040 $ 122 $ 6,321 $ 7,483 Three Months Ended June 30, 2017 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Revenues Payment processing revenue $ 87,678 $ 40,276 $ 13,400 $ 141,354 Account servicing revenue 41,311 167 24,199 65,677 Finance fee revenue 36,552 159 5,374 42,085 Other revenue 34,763 14,398 5,607 54,768 Total revenues $ 200,304 $ 55,000 $ 48,580 $ 303,884 Interest income $ 696 $ 315 $ 5,495 $ 6,506 Six Months Ended June 30, 2018 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Revenues Payment processing revenue $ 219,873 $ 96,066 $ 31,253 $ 347,192 Account servicing revenue 85,229 18,464 53,727 157,420 Finance fee revenue 88,792 487 11,976 101,255 Other revenue 77,941 27,526 14,371 119,838 Total revenues $ 471,835 $ 142,543 $ 111,327 $ 725,705 Interest income $ 2,035 $ 543 $ 13,089 $ 15,667 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 |
Reconciliation of Adjusted Net Income to Income Before Income Taxes | The following table reconciles segment adjusted operating income to income before income taxes: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Segment adjusted operating income Fleet Solutions $ 113,725 $ 91,037 $ 215,633 $ 175,020 Travel and Corporate Solutions 34,448 21,516 59,697 40,702 Health and Employee Benefit Solutions 13,323 12,191 31,962 30,390 Total segment adjusted operating income $ 161,496 $ 124,744 $ 307,292 $ 246,112 Reconciliation: Total segment adjusted operating income $ 161,496 $ 124,744 $ 307,292 $ 246,112 Less: Unallocated corporate expenses 15,044 12,823 28,964 25,121 Acquisition-related intangible amortization 34,921 38,114 70,157 76,093 Other acquisition and divestiture related items 619 239 1,256 2,374 Debt restructuring costs 466 — 3,481 — Stock-based compensation 6,905 7,414 15,860 13,871 Restructuring and other costs 630 2,398 6,301 4,145 Impairment charge — 16,175 — 16,175 Operating income 102,911 47,581 181,273 108,333 Financing interest expense (25,505 ) (28,547 ) (52,842 ) (55,695 ) Net foreign currency (loss) gain (26,734 ) 10,525 (26,344 ) 18,967 Net unrealized gain (loss) on financial instruments 2,706 (2,264 ) 16,214 (699 ) Income before income taxes $ 53,378 $ 27,295 $ 118,301 $ 70,906 |
Supplementary Regulatory Capi40
Supplementary Regulatory Capital Disclosure (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | WEX Bank’s actual and regulatory minimum capital amounts and ratios are presented in the following table: (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 $ 334,555 12.09 % $ 221,347 8.0 % $ 276,683 10.0 % Tier 1 Capital to average assets $ 321,557 11.56 % $ 111,265 4.0 % $ 139,082 5.0 % Common equity to risk-weighted assets $ 321,557 11.62 % $ 124,507 4.5 % $ 179,844 6.5 % Tier 1 Capital to risk-weighted assets $ 321,557 11.62 % $ 166,010 6.0 % $ 221,347 8.0 % December 31, 2017 Total Capital to risk-weighted assets $ 316,129 13.38 % $ 188,991 8.0 % $ 236,239 10.0 % Tier 1 Capital to average assets $ 304,555 12.50 % $ 97,452 4.0 % $ 121,815 5.0 % Common equity to risk-weighted assets $ 304,555 12.89 % $ 106,308 4.5 % $ 153,555 6.5 % Tier 1 Capital to risk-weighted assets $ 304,555 12.89 % $ 141,743 6.0 % $ 188,991 8.0 % |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Assets | $ 6,951,977 | $ 6,742,851 | |
Liabilities | $ 5,159,981 | $ 5,022,293 | |
Restatement Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Assets | $ 3,700 | ||
Liabilities | $ 3,700 |
Recent Accounting Pronounceme42
Recent Accounting Pronouncements (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | Jan. 01, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total revenues | $ 370,876 | $ 303,884 | $ 725,705 | $ 595,241 | |
Number of operating segments | segment | 3,000 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total revenues | 11,891 | $ 21,211 | |||
Fleet Solutions And Travel And Corporate Solutions | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total revenues | 16,200 | 31,100 | |||
Operating expenses | 16,200 | 31,100 | |||
Travel and corporate solutions | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total revenues | 75,764 | 55,000 | 142,543 | 102,713 | |
Travel and corporate solutions | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total revenues | (4,400) | (10,000) | |||
Operating expenses | (4,400) | (10,000) | |||
Health and Employee Benefit Solutions | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total revenues | $ 53,642 | $ 48,580 | $ 111,327 | $ 101,401 | |
Health and Employee Benefit Solutions | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative-effect adjustment | $ 600 |
Revenue - Impact of New Account
Revenue - Impact of New Accounting Guidance (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Payment processing revenue | $ 236,824 | $ 476,539 | ||
Account servicing revenue | 78,716 | $ 65,677 | 157,420 | $ 127,216 |
Finance fee revenue | 51,573 | 42,085 | 101,255 | 85,457 |
Other revenue | 61,849 | 54,768 | 119,838 | 104,836 |
Total revenues | 370,876 | 303,884 | 725,705 | 595,241 |
Service fees | 13,809 | 20,177 | 26,029 | 37,755 |
Provision for credit losses | 11,505 | 16,082 | 25,495 | 28,313 |
Operating interest | 9,528 | 4,619 | 18,013 | 9,512 |
Depreciation and amortization | 20,612 | 18,376 | 41,045 | 35,760 |
Total cost of services | 131,760 | 128,487 | 266,510 | 244,903 |
General and administrative | 48,488 | 40,073 | 103,921 | 82,250 |
Sales and marketing | 57,697 | 39,983 | 114,238 | 80,141 |
Depreciation and amortization | 30,020 | 31,585 | 59,763 | 63,439 |
Operating income | 102,911 | 47,581 | 181,273 | 108,333 |
Financing interest expense | (25,505) | (28,547) | (52,842) | (55,695) |
Net foreign currency (loss) gain | (26,734) | 10,525 | (26,344) | 18,967 |
Net unrealized gain (loss) on financial instruments | 2,706 | (2,264) | 16,214 | (699) |
Income before income taxes | 53,378 | 27,295 | 118,301 | 70,906 |
Income taxes | 13,938 | 10,655 | 29,527 | 25,190 |
Net income | 39,440 | 16,640 | 88,774 | 45,716 |
Less: Net income (loss) from non-controlling interest | 142 | (450) | 843 | (775) |
Net income attributable to shareholders | 39,298 | 17,090 | 87,931 | 46,491 |
Prior to Adoption | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Account servicing revenue | 78,716 | 157,420 | ||
Finance fee revenue | 51,573 | 101,255 | ||
Other revenue | 60,822 | 118,315 | ||
Total revenues | 358,985 | 704,494 | ||
Service fees | 18,181 | 36,076 | ||
Provision for credit losses | 11,505 | 25,495 | ||
Operating interest | 9,528 | 18,013 | ||
Depreciation and amortization | 20,612 | 41,045 | ||
Total cost of services | 136,132 | 276,557 | ||
General and administrative | 48,488 | 103,921 | ||
Sales and marketing | 41,505 | 83,150 | ||
Depreciation and amortization | 30,020 | 59,763 | ||
Operating income | 102,840 | 181,103 | ||
Financing interest expense | (25,505) | (52,842) | ||
Net foreign currency (loss) gain | (26,734) | (26,344) | ||
Net unrealized gain (loss) on financial instruments | 2,706 | 16,214 | ||
Income before income taxes | 53,307 | 118,131 | ||
Income taxes | 13,919 | 29,485 | ||
Net income | 39,388 | 88,646 | ||
Less: Net income (loss) from non-controlling interest | 142 | 843 | ||
Net income attributable to shareholders | 39,246 | 87,803 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Account servicing revenue | 0 | 0 | ||
Finance fee revenue | 0 | 0 | ||
Other revenue | 1,027 | 1,523 | ||
Total revenues | 11,891 | 21,211 | ||
Service fees | (4,372) | (10,047) | ||
Provision for credit losses | 0 | 0 | ||
Operating interest | 0 | 0 | ||
Depreciation and amortization | 0 | 0 | ||
Total cost of services | (4,372) | (10,047) | ||
General and administrative | 0 | 0 | ||
Sales and marketing | 16,192 | 31,088 | ||
Depreciation and amortization | 0 | 0 | ||
Operating income | 71 | 170 | ||
Financing interest expense | 0 | 0 | ||
Net foreign currency (loss) gain | 0 | 0 | ||
Net unrealized gain (loss) on financial instruments | 0 | 0 | ||
Income before income taxes | 71 | 170 | ||
Income taxes | 19 | 42 | ||
Net income | 52 | 128 | ||
Less: Net income (loss) from non-controlling interest | 0 | 0 | ||
Net income attributable to shareholders | 52 | 128 | ||
Payment processing revenue | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Payment processing revenue | 178,738 | 141,354 | 347,192 | 277,732 |
Processing costs | 76,306 | $ 69,233 | 155,928 | $ 133,563 |
Payment processing revenue | Prior to Adoption | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Payment processing revenue | 167,874 | 327,504 | ||
Processing costs | 76,306 | 155,928 | ||
Payment processing revenue | Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Payment processing revenue | 10,864 | 19,688 | ||
Processing costs | $ 0 | $ 0 |
Revenue - Summary of Disaggrega
Revenue - Summary of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | $ 236,824 | $ 476,539 | ||
Total revenues | 370,876 | $ 303,884 | 725,705 | $ 595,241 |
Fleet Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 128,804 | 261,290 | ||
Total revenues | 241,470 | 200,304 | 471,835 | 391,127 |
Travel and corporate solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 61,490 | 116,853 | ||
Total revenues | 75,764 | 55,000 | 142,543 | 102,713 |
Health and Employee Benefit Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 46,530 | 98,396 | ||
Total revenues | 53,642 | 48,580 | 111,327 | 101,401 |
Payment processing revenue | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 178,738 | 141,354 | 347,192 | 277,732 |
Payment processing revenue | Fleet Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 112,895 | 87,678 | 219,873 | 173,940 |
Payment processing revenue | Travel and corporate solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 51,289 | 40,276 | 96,066 | 75,151 |
Payment processing revenue | Health and Employee Benefit Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 14,554 | $ 13,400 | 31,253 | $ 28,641 |
Account servicing revenue | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 41,081 | 86,041 | ||
Total revenues | 37,635 | 71,379 | ||
Account servicing revenue | Fleet Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 5,384 | 13,850 | ||
Total revenues | 37,635 | 71,379 | ||
Account servicing revenue | Travel and corporate solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 8,995 | 18,464 | ||
Total revenues | 0 | 0 | ||
Account servicing revenue | Health and Employee Benefit Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 26,702 | 53,727 | ||
Total revenues | 0 | 0 | ||
Finance fee revenue | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 51,573 | 101,255 | ||
Finance fee revenue | Fleet Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 45,188 | 88,792 | ||
Finance fee revenue | Travel and corporate solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 228 | 487 | ||
Finance fee revenue | Health and Employee Benefit Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 6,157 | 11,976 | ||
Other revenue | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 17,005 | 43,306 | ||
Total revenues | 44,844 | 76,532 | ||
Other revenue | Fleet Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 10,525 | 27,567 | ||
Total revenues | 29,843 | 50,374 | ||
Other revenue | Travel and corporate solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 1,206 | 2,323 | ||
Total revenues | 14,046 | 25,203 | ||
Other revenue | Health and Employee Benefit Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contracts | 5,274 | 13,416 | ||
Total revenues | 955 | 955 | ||
Topic 310 Revenues | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 134,052 | 249,166 | ||
Topic 310 Revenues | Fleet Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 112,666 | 210,545 | ||
Topic 310 Revenues | Travel and corporate solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | 14,274 | 25,690 | ||
Topic 310 Revenues | Health and Employee Benefit Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenues | $ 7,112 | $ 12,931 |
Revenue - Contract Assets and L
Revenue - Contract Assets and Liabilities From Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Jan. 01, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Variable consideration | $ 222,700 | $ 421,200 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract assets | 7,341 | 7,341 | $ 7,053 |
Contract liabilities | 23,481 | 23,481 | 26,592 |
Contract liability, revenue recognized | 2,200 | 5,300 | |
Accounts receivable, net | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract assets | 29,233 | 29,233 | 30,386 |
Other assets | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract assets | $ 48,645 | $ 48,645 | $ 49,068 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligation (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 40,494 |
Performance obligations expected to be satisfied, expected timing | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | Monthly Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 30,803 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | Professional Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 9,691 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 56,365 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Monthly Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 52,182 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | Professional Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 4,183 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 32,160 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Monthly Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 32,160 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Professional Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 16,699 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Monthly Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 16,699 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Professional Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 7,394 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Monthly Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 7,394 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Professional Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 683 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Monthly Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 683 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Professional Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 153,795 |
Performance obligations expected to be satisfied, expected timing | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Monthly Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 139,921 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | Professional Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 13,874 |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | Oct. 18, 2017 | |
Less: | |||
Recorded goodwill | $ 1,843,575 | $ 1,876,132 | |
AOC | |||
Business Acquisition [Line Items] | |||
Total consideration | 129,828 | 129,828 | $ 129,800 |
Less: | |||
Cash | 15,546 | 15,546 | |
Accounts receivable | 4,271 | 4,171 | |
Property and equipment | 1,201 | 2,530 | |
Other liabilities | (1,133) | (685) | |
Recorded goodwill | 47,573 | 67,706 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||
Total consideration | 0 | ||
Cash | 0 | ||
Accounts receivable | 100 | ||
Property and equipment | (1,329) | ||
Other liabilities | (448) | ||
Recorded goodwill | $ (20,133) | ||
Weighted average life (in years) | 5 years 6 months | ||
Total revenues | 6,700 | ||
Net loss before taxes | 600 | ||
Customer relationships | AOC | |||
Less: | |||
Intangible assets | $ 15,200 | 15,000 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||
Intangible assets | $ 200 | ||
Weighted average life (in years) | 9 years | ||
Developed technologies | AOC | |||
Less: | |||
Intangible assets | $ 24,100 | 24,100 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||
Intangible assets | $ 0 | ||
Weighted average life (in years) | 3 years 4 months 24 days | ||
Trademarks and trade names | AOC | |||
Less: | |||
Intangible assets | $ 1,470 | 1,460 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||
Intangible assets | $ 10 | ||
Weighted average life (in years) | 4 years 3 months 18 days | ||
In Process Research and Development | AOC | |||
Less: | |||
In-process research and development | $ 21,600 | $ 0 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||
Intangible assets | $ 21,600 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | ||
Trade receivable payments terms (30 days or less) | 30 days | |
Threshold period past due for write-off of trade accounts receivable | 150 days | |
Revolving line-of-credit facility under 2016 Credit Agreement | ||
Concentration Risk [Line Items] | ||
Receivables with revolving credit balances | $ 18 | $ 12.2 |
29 days or less past due | Credit Concentration Risk | Accounts receivable, net | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 98.00% | 95.00% |
59 days or less past due | Credit Concentration Risk | Accounts receivable, net | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 99.00% | 97.00% |
Accounts Receivable - Changes i
Accounts Receivable - Changes in Reserves for Accounts Receivable (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance, beginning of year | $ 30,207 | $ 20,092 |
Provision for credit losses | 25,495 | 28,313 |
Charges to other accounts | 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 |
Earnings per Share - Summary of
Earnings per Share - Summary of Net Earning Attributable to Shareholders and Reconciliation of Basic and Diluted Shares (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to shareholders | $ 39,298 | $ 17,090 | $ 87,931 | $ 46,491 |
Weighted average common shares outstanding – Basic (in shares) | 43,181 | 43,002 | 43,116 | 42,937 |
Dilutive impact of share-based compensation awards (in shares) | 365 | 58 | 408 | 153 |
Weighted average common shares outstanding – Diluted (in shares) | 43,546 | 43,060 | 43,524 | 43,090 |
Earnings per Share - Stock Opti
Earnings per Share - Stock Options and Restricted Stock Units (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | 0 | 0 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) $ in Billions | Jun. 30, 2018USD ($) | Dec. 31, 2017contract |
Derivative [Line Items] | ||
Lines of credit outstanding | $ 1.7 | |
Interest rate swaps | ||
Derivative [Line Items] | ||
Number of derivative instruments held (agreement) | contract | 5 | |
Borrowings under derivative agreements | $ 1.3 | |
Interest rate swaps | Minimum | ||
Derivative [Line Items] | ||
Fixed rate variable interest | 0.896% | |
Interest rate swaps | Maximum | ||
Derivative [Line Items] | ||
Fixed rate variable interest | 2.212% |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Interest Rate Swaps (Details) - Derivatives Not Designated as Hedging Instruments | Jun. 30, 2018USD ($) |
Tranche A | |
Derivative [Line Items] | |
Notional amount at inception (in thousands) | $ 300,000,000 |
Fixed interest rate | 2.204% |
Tranche B | |
Derivative [Line Items] | |
Notional amount at inception (in thousands) | $ 200,000,000 |
Fixed interest rate | 2.212% |
Tranche C | |
Derivative [Line Items] | |
Notional amount at inception (in thousands) | $ 400,000,000 |
Amortization | 5.00% |
Fixed interest rate | 1.108% |
Tranche D | |
Derivative [Line Items] | |
Notional amount at inception (in thousands) | $ 150,000,000 |
Fixed interest rate | 1.125% |
Tranche E | |
Derivative [Line Items] | |
Notional amount at inception (in thousands) | $ 250,000,000 |
Fixed interest rate | 0.896% |
Derivative Instruments - Locati
Derivative Instruments - Location and Amounts of Interest Rate Swap Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net unrealized gain (loss) on financial instruments | $ 2,706 | $ (2,264) | $ 16,214 | $ (699) |
Derivatives Not Designated as Hedging Instruments | Net unrealized gain on interest rate swap agreements | Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net unrealized gain (loss) on financial instruments | 3,944 | (2,264) | 17,452 | (699) |
Derivatives Not Designated as Hedging Instruments | Financing interest income | Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net unrealized gain (loss) on financial instruments | $ 1,363 | $ (77) | $ 1,676 | $ (620) |
Deposits - Narrative (Details)
Deposits - Narrative (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Certificates of deposits denominations in dollar amount | $ 250,000 | |
Maximum money market and demand deposit accounts purchasable | 125,000,000 | |
Outstanding balance of ICS purchases | $ 50,000,000 | |
Minimum | ||
Debt Instrument [Line Items] | ||
Certificate of deposits maturities period | 28 days | |
Certificate of deposits, fixed interest rates range (as a percent) | 1.15% | 1.00% |
Maximum | ||
Debt Instrument [Line Items] | ||
Certificate of deposits maturities period | 3 years | |
Certificate of deposits, fixed interest rates range (as a percent) | 2.90% | 2.15% |
Financing and Other Debt - Sche
Financing and Other Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 2,538,638 | $ 2,461,048 |
Current portion of gross debt | 387,228 | 404,233 |
Less: Unamortized debt issuance costs | (7,690) | (7,015) |
Short-term debt, net | 379,538 | 397,218 |
Long-term gross debt | 2,151,410 | 2,056,815 |
Less: Unamortized debt issuance costs | (26,301) | (29,063) |
Long-term debt, net | 2,125,109 | 2,027,752 |
Lines of credit outstanding | 1,700,000 | |
Loan Participations and Assignments | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 204,493 | 184,990 |
Revolving line-of-credit facility under 2016 Credit Agreement | 2016 Credit Agreement | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 516,269 | 405,965 |
Secured debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 144,533 | 126,901 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 44,000 | 0 |
Line of Credit | Revolving line-of-credit facility under 2016 Credit Agreement | 2016 Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 136,535 |
Line of Credit | Secured debt | 2016 Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 1,737,723 | 1,602,875 |
Notes payable | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 400,000 | 400,000 |
Letter of Credit | Revolving line-of-credit facility under 2016 Credit Agreement | 2016 Credit Agreement | ||
Debt Instrument [Line Items] | ||
Lines of credit outstanding | $ 53,731 | $ 27,500 |
Deposits - Schedule of Composi
Deposits - Schedule of Composition of Deposits (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Banking and Thrift [Abstract] | ||
Interest-bearing brokered money market deposits | $ 317,685 | $ 285,899 |
Customer deposits | 77,000 | 70,211 |
Certificates of deposit with maturities within 1 year | 433,558 | 630,879 |
Short-term deposits | 828,243 | 986,989 |
Certificates of deposit with maturities greater than 1 year and less than 5 years | 326,303 | 306,865 |
Total deposits | $ 1,154,546 | $ 1,293,854 |
Weighted average cost of funds on certificates of deposit outstanding (as a percent) | 1.85% | 1.51% |
Weighted average cost of interest-bearing money market deposits (as a percent) | 2.12% | 1.49% |
Financing and Other Debt - Addi
Financing and Other Debt - Additional Information (Details) - USD ($) | Jan. 17, 2018 | Apr. 07, 2016 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Jan. 16, 2018 |
Debt Instrument [Line Items] | ||||||||
Loss on extinguishment of debt | $ 1,100,000 | |||||||
General and administrative costs incurred | 3,000,000 | |||||||
Debt issuance costs | $ 2,900,000 | |||||||
Long-term debt | $ 2,538,638,000 | $ 2,538,638,000 | $ 2,461,048,000 | |||||
Payments for equity method investments | $ 2,617,000 | $ 0 | ||||||
London Interbank Offered Rate (LIBOR) | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate during period, percent | 2.25% | |||||||
Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate during period, percent | 1.25% | |||||||
2016 Credit Agreement Tranche A | Interest Rate Option One | Eurocurrency Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate, reduction in basis points | 0.50% | |||||||
Margin on variable rate, percent | 2.00% | |||||||
2016 Credit Agreement Tranche B | ||||||||
Debt Instrument [Line Items] | ||||||||
Weighted average annual interest rate, percent | 4.40% | 4.40% | 4.20% | |||||
2016 Credit Agreement Tranche B | Interest Rate Option One | Eurocurrency Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin on variable rate, percent | 2.25% | |||||||
Debt instrument, interest rate, floor | 0.00% | |||||||
Australian Securitization Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate during period, percent | 2.87% | 2.53% | ||||||
Debt instrument, term | 1 year | |||||||
Percentage used as collateral | 85.00% | 85.00% | ||||||
Short-term debt, net | $ 91,100,000 | $ 91,100,000 | $ 90,000,000 | |||||
WEX Latin America Securitization Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Payments for equity method investments | $ 2,600,000 | |||||||
European Securitization Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate during period, percent | 1.14% | 1.11% | ||||||
Debt instrument, term | 5 years | |||||||
Securitized debt | 23,300,000 | $ 23,300,000 | $ 17,900,000 | |||||
Loan Participations and Assignments | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | 204,493,000 | 204,493,000 | 184,990,000 | |||||
Debt balance | 204,500,000 | $ 204,500,000 | $ 185,000,000 | |||||
Loan Participations and Assignments | London Interbank Offered Rate (LIBOR) | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin on variable rate, percent | 2.25% | |||||||
Loan Participations and Assignments, Amounts Maturing August 2018 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, aggregate principal amount | 85,000,000 | $ 85,000,000 | ||||||
Loan Participations and Assignments, Amounts Maturing August 2020 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, aggregate principal amount | 50,000,000 | 50,000,000 | ||||||
Loan Participations and Assignments, Amounts Maturing On Demand | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, aggregate principal amount | 69,500,000 | 69,500,000 | ||||||
Credit Facility Term Loans | 2016 Credit Agreement Tranche A | ||||||||
Debt Instrument [Line Items] | ||||||||
Current borrowing capacity | 455,000,000 | 455,000,000 | ||||||
Mandatory quarterly payments | 5,700,000 | |||||||
Credit Facility Term Loans | 2016 Credit Agreement Tranche B | ||||||||
Debt Instrument [Line Items] | ||||||||
Current borrowing capacity | $ 1,335,000,000 | 1,335,000,000 | 1,335,000,000 | $ 1,182,000,000 | ||||
Mandatory quarterly payments | 3,400,000 | |||||||
Revolving line-of-credit facility under 2016 Credit Agreement | 2016 Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Current borrowing capacity | $ 570,000,000 | $ 570,000,000 | ||||||
WEX Latin America | ||||||||
Debt Instrument [Line Items] | ||||||||
Weighted average annual interest rate, percent | 16.90% | 16.90% | 21.20% | |||||
Long-term debt | $ 7,889,000 | $ 7,889,000 | $ 9,747,000 | |||||
WEX Latin America | WEX Latin America Securitization Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Securitized debt | 30,100,000 | 30,100,000 | 19,000,000 | |||||
Servicing fee income | 2,300,000 | 4,400,000 | ||||||
Senior Notes | Notes payable | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 400,000,000 | $ 400,000,000 | 400,000,000 | |||||
Interest rate, stated percentage | 4.75% | 4.75% | ||||||
Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 44,000,000 | $ 44,000,000 | $ 0 | |||||
Interest rate, stated percentage | 2.13% | 2.13% | ||||||
Maximum borrowing capacity | $ 106,000,000 | $ 106,000,000 |
Off-Balance Sheet Arrangement (
Off-Balance Sheet Arrangement (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Receivables [Abstract] | |||||
Proceeds from sale of factoring receivables | $ 190.7 | $ 360.9 | |||
Loss on sale of factoring receivables | 1.2 | $ 0 | 2.3 | $ 0 | |
Amount of factoring receivables | 75.4 | 75.4 | $ 61.8 | ||
Amount of factoring receivables, portion in excess of the established credit limit | $ 4.6 | $ 4.6 | $ 3.7 |
Fair Value - Assets and Liabili
Fair Value - Assets and Liabilities Measured at Fair Value and Related Hierarchy Levels (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Total available-for-sale securities | $ 22,970 | $ 23,358 |
Level 2 | Interest rate swaps | ||
Assets | ||
Derivative asset | 31,674 | 19,595 |
Liabilities | ||
Interest rate swaps | 0 | 5,373 |
Level 1 | ||
Assets | ||
Executive deferred compensation plan trust | 6,946 | 6,798 |
Municipal bonds | Level 2 | ||
Assets | ||
Total available-for-sale securities | 469 | 534 |
Asset-backed securities | Level 2 | ||
Assets | ||
Total available-for-sale securities | 328 | 345 |
Mortgage-backed securities | Level 2 | ||
Assets | ||
Total available-for-sale securities | 279 | 305 |
Fixed-income mutual fund | Level 1 | ||
Assets | ||
Total available-for-sale securities | $ 21,894 | $ 22,174 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Senior Notes | Estimate of Fair Value Measurement | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 402 | $ 410 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||||
Effective tax rate | 26.10% | 39.00% | 25.00% | 35.50% | ||
Tax Act, provisional income tax benefit | $ 60.6 | |||||
Undistributed earnings of certain foreign subsidiaries | $ 76.6 | $ 58.7 | $ 76.6 | $ 58.7 | ||
Tax Act, income tax expense, transition tax | $ 9.1 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Fair value of units awarded | $ 2.7 | $ 17.2 | $ 30.1 | $ 45.3 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Assumptions Used to Calculate Fair Value of Stock Options (Details) - Stock Options - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average expected life (in years) | 6 years | 6 years |
Weighted average exercise price (in dollars per share) | $ 158.23 | $ 104.95 |
Expected stock price volatility (as a percent) | 27.35% | 30.67% |
Weighted average risk–free rate | 2.69% | 2.13% |
Weighted average fair value (in dollars per share) | $ 51.27 | $ 35.58 |
Restructuring Activities - Addi
Restructuring Activities - Additional Information (Details) $ in Millions | Jun. 30, 2018USD ($) |
Restructuring and Related Activities [Abstract] | |
Restructuring charges incurred to date | $ 24.7 |
Restructuring Activities - Sche
Restructuring Activities - Schedule of Restructuring Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Restructuring Reserve | ||||
Balance, beginning of period | $ 2,976 | $ 10,572 | $ 8,511 | $ 10,657 |
Restructuring (reversals) charges | 55 | 1,676 | 222 | 2,160 |
Cash paid | (1,345) | (3,864) | (7,170) | (4,802) |
Other | 0 | (151) | 22 | 107 |
Impact of foreign currency translation | (101) | 450 | 0 | 561 |
Balance, end of period | 1,585 | 8,683 | 1,585 | 8,683 |
Year 2,015 | ||||
Restructuring Reserve | ||||
Balance, beginning of period | 2,337 | 5,231 | 2,680 | 5,231 |
Restructuring (reversals) charges | (33) | 1,223 | (47) | 1,533 |
Cash paid | (1,082) | (2,488) | (1,491) | (2,836) |
Liability transfer from one plan to another | 0 | (1,158) | 0 | (1,158) |
Impact of foreign currency translation | (79) | 200 | 1 | 238 |
Balance, end of period | 1,143 | 3,008 | 1,143 | 3,008 |
Year 2,016 | ||||
Restructuring Reserve | ||||
Balance, beginning of period | 438 | 3,202 | 738 | 3,662 |
Restructuring (reversals) charges | 34 | 219 | 30 | (314) |
Cash paid | (41) | (487) | (356) | (487) |
Liability transfer from one plan to another | 0 | 1,158 | 0 | 1,158 |
Impact of foreign currency translation | (21) | 250 | (2) | 323 |
Balance, end of period | 410 | 4,342 | 410 | 4,342 |
Acquisition Integration Restructuring Initiative | ||||
Restructuring Reserve | ||||
Balance, beginning of period | 201 | 2,139 | 5,093 | 1,764 |
Restructuring (reversals) charges | 54 | 234 | 239 | 941 |
Cash paid | (222) | (889) | (5,323) | (1,479) |
Other | 0 | (151) | 22 | 107 |
Impact of foreign currency translation | (1) | 0 | 1 | 0 |
Balance, end of period | $ 32 | $ 1,333 | $ 32 | $ 1,333 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2018segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Revenue b
Segment Information - Revenue by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Payment processing revenue | $ 236,824 | $ 476,539 | ||
Account servicing revenue | 78,716 | $ 65,677 | 157,420 | $ 127,216 |
Finance fee revenue | 51,573 | 42,085 | 101,255 | 85,457 |
Other revenue | 61,849 | 54,768 | 119,838 | 104,836 |
Total revenues | 370,876 | 303,884 | 725,705 | 595,241 |
Interest income | 7,483 | 6,506 | 15,667 | 14,535 |
Fleet Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Payment processing revenue | 128,804 | 261,290 | ||
Account servicing revenue | 43,019 | 41,311 | 85,229 | 77,380 |
Finance fee revenue | 45,188 | 36,552 | 88,792 | 72,981 |
Other revenue | 40,368 | 34,763 | 77,941 | 66,826 |
Total revenues | 241,470 | 200,304 | 471,835 | 391,127 |
Interest income | 1,040 | 696 | 2,035 | 1,820 |
Travel and Corporate Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Payment processing revenue | 61,490 | 116,853 | ||
Account servicing revenue | 8,995 | 167 | 18,464 | 322 |
Finance fee revenue | 228 | 159 | 487 | 382 |
Other revenue | 15,252 | 14,398 | 27,526 | 26,858 |
Total revenues | 75,764 | 55,000 | 142,543 | 102,713 |
Interest income | 122 | 315 | 543 | 361 |
Health and Employee Benefit Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Payment processing revenue | 46,530 | 98,396 | ||
Account servicing revenue | 26,702 | 24,199 | 53,727 | 49,514 |
Finance fee revenue | 6,157 | 5,374 | 11,976 | 12,094 |
Other revenue | 6,229 | 5,607 | 14,371 | 11,152 |
Total revenues | 53,642 | 48,580 | 111,327 | 101,401 |
Interest income | 6,321 | 5,495 | 13,089 | 12,354 |
Payment processing revenue | ||||
Segment Reporting Information [Line Items] | ||||
Payment processing revenue | 178,738 | 141,354 | 347,192 | 277,732 |
Payment processing revenue | Fleet Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Payment processing revenue | 112,895 | 87,678 | 219,873 | 173,940 |
Payment processing revenue | Travel and Corporate Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Payment processing revenue | 51,289 | 40,276 | 96,066 | 75,151 |
Payment processing revenue | Health and Employee Benefit Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Payment processing revenue | $ 14,554 | $ 13,400 | $ 31,253 | $ 28,641 |
Segment Information - Reconcili
Segment Information - Reconciliation of Adjusted Operating Income to Income Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Adjusted operating income | $ 161,496 | $ 124,744 | $ 307,292 | $ 246,112 |
Stock-based compensation | 15,860 | 13,871 | ||
Impairment charge | 0 | 16,175 | 0 | 16,175 |
Operating income | 102,911 | 47,581 | 181,273 | 108,333 |
Financing interest expense | (25,505) | (28,547) | (52,842) | (55,695) |
Net foreign currency (loss) gain | (26,734) | 10,525 | (26,344) | 18,967 |
Net unrealized gain (loss) on financial instruments | 2,706 | (2,264) | 16,214 | (699) |
Income before income taxes | 53,378 | 27,295 | 118,301 | 70,906 |
Fleet Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted operating income | 113,725 | 91,037 | 215,633 | 175,020 |
Travel and corporate solutions | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted operating income | 34,448 | 21,516 | 59,697 | 40,702 |
Health and Employee Benefit Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted operating income | 13,323 | 12,191 | 31,962 | 30,390 |
Segment reconciling items | ||||
Segment Reporting Information [Line Items] | ||||
Unallocated corporate expenses | 15,044 | 12,823 | 28,964 | 25,121 |
Acquisition-related intangible amortization | 34,921 | 38,114 | 70,157 | 76,093 |
Other acquisition and divestiture related items | 619 | 239 | 1,256 | 2,374 |
Debt restructuring costs | 466 | 0 | 3,481 | 0 |
Stock-based compensation | 6,905 | 7,414 | 15,860 | 13,871 |
Restructuring and other costs | 630 | 2,398 | 6,301 | 4,145 |
Impairment charge | $ 0 | $ 16,175 | $ 0 | $ 16,175 |
Supplementary Regulatory Capi70
Supplementary Regulatory Capital Disclosure (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Total Capital to risk-weighted assets, Actual Amount | $ 334,555 | $ 316,129 |
Total Capital to risk-weighted assets, Actual, Ratio | 12.09% | 13.38% |
Total Capital to risk-weighted assets, Minimum for Capital Adequacy Purposes Amount | $ 221,347 | $ 188,991 |
Total Capital to risk-weighted assets, Minimum for Capital Adequacy Purposes, Ratio | 8.00% | 8.00% |
Total Capital to risk-weighted assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 276,683 | $ 236,239 |
Total Capital to risk-weighted assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 10.00% | 10.00% |
Tier 1 Capital to average assets, Actual Amount | $ 321,557 | $ 304,555 |
Tier 1 Capital to average assets, Actual, Ratio | 11.56% | 12.50% |
Tier 1 Capital to average assets, Minimum for Capital Adequacy Purposes Amount | $ 111,265 | $ 97,452 |
Tier 1 Capital to average assets, Minimum for Capital Adequacy Purposes, Ratio | 4.00% | 4.00% |
Tier 1 Capital to average assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 139,082 | $ 121,815 |
Tier 1 Capital to average assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provision, Ratio | 5.00% | 5.00% |
Common equity to risk-weighted assets, Actual Amount | $ 321,557 | $ 304,555 |
Common equity to risk-weighted assets, Actual, Ratio | 11.62% | 12.89% |
Common equity to risk-weighted assets, Minimum for Capital Adequacy Purposes Amount | $ 124,507 | $ 106,308 |
Common equity to risk-weighted assets, Minimum for Capital Adequacy Purposes, Ratio | 4.50% | 4.50% |
Common equity to risk-weighted assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 179,844 | $ 153,555 |
Common equity to risk-weighted assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 6.50% | 6.50% |
Tier 1 Capital to risk-weighted assets, Actual Amount | $ 321,557 | $ 304,555 |
Tier 1 Capital to risk-weighted assets, Actual, Ratio | 11.62% | 12.89% |
Tier 1 Capital to risk-weighted assets, Minimum for Capital Adequacy Purposes Amount | $ 166,010 | $ 141,743 |
Tier 1 Capital to risk-weighted assets, Minimum for Capital Adequacy Purposes, Ratio | 6.00% | 6.00% |
Tier 1 Capital to risk-weighted assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 221,347 | $ 188,991 |
Tier 1 capital to risk-weighted assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount, Ratio | 8.00% | 8.00% |