Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | WEX Inc. | |
Trading Symbol | WEX | |
Entity Central Index Key | 0001309108 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 43,249,922 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Payment processing revenue | $ 266,312 | $ 239,715 |
Account servicing revenue | 87,086 | 78,704 |
Finance fee revenue | 46,373 | 48,881 |
Other revenue | 61,619 | 57,989 |
Total revenues | 381,876 | 354,028 |
Cost of services | ||
Service fees | 14,246 | 12,326 |
Provision for credit losses | 17,791 | 14,226 |
Operating interest | 9,564 | 8,485 |
Depreciation and amortization | 20,513 | 20,450 |
Total cost of services | 153,233 | 128,593 |
General and administrative | 64,405 | 55,309 |
Sales and marketing | 64,119 | 56,541 |
Depreciation and amortization | 31,184 | 29,726 |
Operating income | 68,935 | 83,859 |
Financing interest expense | (31,112) | (27,337) |
Net foreign currency (loss) gain | (3,885) | 390 |
Net unrealized (loss) gain on financial instruments | (11,912) | 13,508 |
Income before income taxes | 22,026 | 70,420 |
Income taxes | 5,818 | 17,749 |
Net income | 16,208 | 52,671 |
Less: Net income from non-controlling interests | 74 | 701 |
Net income attributable to shareholders | $ 16,134 | $ 51,970 |
Net income attributable to WEX Inc. per share: | ||
Basic (in dollars per share) | $ 0.37 | $ 1.21 |
Diluted (in dollars per share) | $ 0.37 | $ 1.20 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 43,220 | 43,049 |
Diluted (in shares) | 43,572 | 43,450 |
Payment processing revenue | ||
Revenues | ||
Payment processing revenue | $ 186,798 | $ 168,454 |
Cost of services | ||
Processing costs | $ 91,119 | $ 73,106 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 16,208 | $ 52,671 |
Foreign currency translation | 4,371 | 1,693 |
Comprehensive income | 20,579 | 54,364 |
Less: Comprehensive income attributable to non-controlling interests | 36 | 991 |
Comprehensive income attributable to WEX Inc. | $ 20,543 | $ 53,373 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 387,274 | $ 541,498 |
Restricted cash | 138,804 | 13,533 |
Accounts receivable (net of allowances of $46,742 in 2019 and $46,948 in 2018) | 2,830,555 | 2,584,203 |
Securitized accounts receivable, restricted | 135,438 | 109,871 |
Prepaid expenses and other current assets | 153,093 | 149,021 |
Total current assets | 3,645,164 | 3,398,126 |
Property, equipment and capitalized software (net of accumulated depreciation of $325,067 in 2019 and $307,750 in 2018) | 196,977 | 187,868 |
Goodwill | 2,331,110 | 1,832,129 |
Other intangible assets (net of accumulated amortization of $542,833 in 2019 and $509,055 in 2018) | 1,382,279 | 1,034,194 |
Investment securities | 24,772 | 24,406 |
Deferred income taxes, net | 11,091 | 9,643 |
Other assets | 363,849 | 284,229 |
Total assets | 7,955,242 | 6,770,595 |
Liabilities and Stockholders’ Equity | ||
Accounts payable | 1,093,128 | 814,742 |
Accrued expenses | 278,413 | 312,268 |
Restricted cash payable | 138,804 | 13,533 |
Short-term deposits | 835,338 | 927,444 |
Short-term debt, net | 184,357 | 216,517 |
Other current liabilities | 86,388 | 27,067 |
Total current liabilities | 2,616,428 | 2,311,571 |
Long-term debt, net | 2,809,361 | 2,133,923 |
Long-term deposits | 300,349 | 345,231 |
Deferred income taxes, net | 203,274 | 151,685 |
Other liabilities | 108,949 | 32,261 |
Total liabilities | 6,038,361 | 4,974,671 |
Redeemable non-controlling interest | 99,993 | 0 |
Stockholders’ Equity | ||
Common stock $0.01 par value; 175,000 shares authorized; 47,674 issued in 2019 and 47,557 in 2018; 43,246 shares outstanding in 2019 and 43,129 in 2018 | 476 | 475 |
Additional paid-in capital | 635,046 | 593,262 |
Retained earnings | 1,456,327 | 1,481,593 |
Accumulated other comprehensive loss | (112,882) | (117,291) |
Treasury stock at cost; 4,428 shares in 2019 and 2018 | (172,342) | (172,342) |
Total WEX Inc. stockholders’ equity | 1,806,625 | 1,785,697 |
Non-controlling interest | 10,263 | 10,227 |
Total stockholders’ equity | 1,816,888 | 1,795,924 |
Total liabilities and stockholders’ equity | $ 7,955,242 | $ 6,770,595 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, reserve for credit losses | $ 46,742 | $ 46,948 |
Property, equipment and capitalized software, accumulated depreciation | 325,067 | 307,750 |
Accumulated amortization | $ 542,833 | $ 509,055 |
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) | 47,674,000 | 47,557,000 |
Common stock, shares outstanding (in shares) | 43,246,000 | 43,129,000 |
Treasury stock, shares (in shares) | 4,428,000 | 4,428,000 |
CONDENSED CONSOLIDATED STATEM_3
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 |
Beginning Balance (in shares) at Dec. 31, 2017 | 47,352 | ||||||
Beginning balance at Dec. 31, 2017 | $ 1,630,100 | $ 473 | $ 569,319 | $ (89,230) | $ (172,342) | $ 1,312,660 | $ 9,220 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock issued (in shares) | 148 | ||||||
Stock issued | 576 | $ 2 | 574 | ||||
Share repurchases for tax withholdings | (11,810) | (11,810) | |||||
Stock-based compensation expense | 8,955 | 8,955 | |||||
Foreign currency translation | 1,693 | 1,403 | 290 | ||||
Net income | 52,671 | 51,970 | 701 | ||||
Ending Balance (in shares) at Mar. 31, 2018 | 47,500 | ||||||
Ending balance at Mar. 31, 2018 | 1,682,823 | $ 475 | 567,038 | (87,827) | (172,342) | 1,365,268 | 10,211 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning balances, adjusted | 1,795,924 | $ 475 | 593,262 | (117,291) | (172,342) | 1,481,593 | 10,227 |
Beginning Balance (in shares) at Dec. 31, 2018 | 47,557 | ||||||
Beginning balance at Dec. 31, 2018 | 1,795,924 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock issued (in shares) | 117 | ||||||
Stock issued | 405 | $ 1 | 404 | ||||
Share repurchases for tax withholdings | (9,723) | (9,723) | |||||
Stock-based compensation expense | 9,703 | 9,703 | |||||
Adjustments of redeemable non-controlling interest | (41,400) | 41,400 | (41,400) | ||||
Foreign currency translation | 4,371 | 4,409 | (38) | ||||
Net income | 16,208 | 16,134 | 74 | ||||
Ending Balance (in shares) at Mar. 31, 2019 | 47,674 | ||||||
Ending balance at Mar. 31, 2019 | $ 1,816,888 | $ 476 | $ 635,046 | $ (112,882) | $ (172,342) | $ 1,456,327 | $ 10,263 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net income | $ 16,208 | $ 52,671 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Net unrealized loss (gain) | 12,870 | (12,780) |
Stock-based compensation | 9,703 | 8,955 |
Depreciation and amortization | 51,697 | 50,176 |
Debt restructuring and debt issuance cost amortization | 2,095 | 3,676 |
Provision for deferred taxes | 3,402 | 16,296 |
Provision for credit losses | 17,791 | 14,226 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable and securitized accounts receivable | (239,658) | (264,475) |
Prepaid expenses and other current and other long-term assets | (7,109) | 121,622 |
Accounts payable | 245,657 | 119,334 |
Accrued expenses and restricted cash payable | (43,554) | (17,404) |
Income taxes | (1,153) | (1,339) |
Other current and other long-term liabilities | 2,161 | (3,152) |
Net cash provided by operating activities | 70,110 | 87,806 |
Cash flows from investing activities | ||
Purchases of property, equipment and capitalized software | (28,385) | (14,770) |
Acquisitions, net of cash acquired | (568,426) | 0 |
Purchase of equity investment | 0 | (2,307) |
Purchases of investment securities | (140) | (121) |
Maturities of investment securities | 85 | 72 |
Net cash used for investing activities | (596,866) | (17,126) |
Cash flows from financing activities | ||
Repurchase of share-based awards to satisfy tax withholdings | (9,723) | (11,810) |
Proceeds from stock option exercises | 405 | 576 |
Net change in deposits | (136,717) | (185,433) |
Net activity on other debt | (57,556) | (19,027) |
Borrowings on revolving credit facility | 863,756 | 488,503 |
Repayments on revolving credit facility | (693,600) | (625,821) |
Borrowings on term loans | 550,000 | 153,000 |
Repayments on term loans | (15,871) | (9,076) |
Debt issuance costs | (3,443) | (2,907) |
Net change in securitized debt | (1,191) | 19,402 |
Net cash provided by (used for) financing activities | 496,060 | (192,593) |
Effect of exchange rates on cash, cash equivalents and restricted cash | 1,743 | (587) |
Net change in cash, cash equivalents and restricted cash | (28,953) | (122,500) |
Cash, cash equivalents and restricted cash, beginning of period | 555,031 | 522,385 |
Cash, cash equivalents and restricted cash, end of period | 526,078 | 399,885 |
Supplemental disclosure of non-cash investing and financing activities | ||
Capital expenditures incurred but not paid | $ 2,046 | $ 4,801 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 , filed with the SEC on March 18, 2019 and our Form 10–K/A filed with the SEC on March 20, 2019. 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 months ended March 31, 2019 are not necessarily indicative of the results for any future periods or the year ending December 31, 2019 . Effective January 1, 2019, the Company modified the presentation of the unaudited condensed balance sheets to separately classify its restricted cash payable. The prior period has been reclassified to conform with this presentation. There was no change to current liabilities as a result of this change. We apply the same accounting policies in preparing our quarterly and annual financial statements, with the exception of the new leasing standard which is required to be adopted on a prospective basis. Refer to Note 2, Recent Accounting Pronouncements, for more information. 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. Revision of Prior Period Unaudited Condensed Consolidated Financial Statements for Correction of Immaterial Errors As more fully described in our 2018 Form 10–K, in 2018 we revised our prior year financial statements to correct for immaterial errors in the financial statements of our Brazilian subsidiary and certain other immaterial errors impacting prior years that were not previously recorded. The accompanying quarterly financial statements have been revised for these errors. Collectively, hereinafter these revisions to correct are referred to as the “Revised” financial statements or the “Revision”. Management believes that the effects of this Revision are not material to our previously issued unaudited condensed consolidated financial statements. The effects of the Revision on our unaudited condensed consolidated statements of income and cash flows were as follows: Three months ended March 31, 2018 (In thousands, except per share data) As Previously Reported Brazil Adjustments Other Immaterial Adjustments As Revised Total revenues $ 354,829 $ (801 ) $ — $ 354,028 Processing costs $ 79,640 $ (6,534 ) $ — $ 73,106 Provision for credit losses $ 13,990 $ 236 $ — $ 14,226 Operating income $ 78,362 $ 5,497 $ — $ 83,859 Income taxes $ 15,589 $ 2,343 $ (183 ) $ 17,749 Net income $ 49,334 $ 3,154 $ 183 $ 52,671 Net income attributable to shareholders $ 48,633 $ 3,154 $ 183 $ 51,970 Net income attributable to WEX Inc. per share Basic $ 1.13 $ 0.08 $ — $ 1.21 Diluted $ 1.12 $ 0.08 $ — $ 1.20 Three months ended March 31, 2018 (In thousands) As Previously Reported Brazil Adjustments Other Immaterial Adjustments As Revised Net cash provided by operating activities $ 85,243 $ — $ 2,563 $ 87,806 Effect of exchange rates on cash, cash equivalents and restricted cash $ (2,577 ) $ — $ 1,990 $ (587 ) Cash, cash equivalents and restricted cash, beginning of period $ 526,938 $ — $ (4,553 ) $ 522,385 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2019 | |
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 three months ended March 31, 2019 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 Three Months Ended March 31, 2019 ASU 2016–02 This standard requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The Company adopted ASU 2016–02 effective January 1, 2019, using the modified retrospective approach, and all practical expedients permitted under the transition guidance. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016–02, Leases (Topic 842), which requires leases with a duration greater than twelve months to be recognized on the balance sheet as right-of-use (“ROU”) assets and lease liabilities. We adopted the new standard using the modified retrospective approach and have elected the package of practical expedients permitted under the transition guidance, including the hindsight practical expedients for expired or existing contracts, which allowed us to carryforward our historical determination of (i) whether a contract is or contains a lease, (ii) lease classification and (iii) initial direct costs. Additionally, we elected the practical expedients which allowed us to (i) not perform an allocation of lease and non-lease components for real estate leases, (ii) continue to account for short-term leases under Topic 840 and (iii) utilize our incremental borrowing rate (“IBR”), rather than the rate implicit in each lease, to calculate the present value of the remaining lease payments. As such, the unaudited condensed consolidated financial statements for the period ended March 31, 2019 are presented under the new standard, while comparative periods presented continue to be reported in accordance with Topic 840. The most significant impact of adoption was the recording of operating lease ROU assets and operating lease liabilities on our unaudited condensed consolidated balance sheets at January 1, 2019. Refer to Note 14, Leases, for more information. The standard did not materially impact our results of operations or cash flows. ASU 2018 – 15 This standard clarifies the accounting for capitalizing implementation costs in a cloud computing arrangement that is a service contract. The standard provides that implementation costs be treated using the same criteria used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. Effective January 1, 2019, the Company early adopted ASU 2018–15 on a prospective basis. Under the standard, we now capitalize implementation costs related to our cloud migration of technology platforms to the cloud. Such amounts are amortized over the lesser of the term of the hosting arrangement, considering any explicit renewal options for which we are reasonably certain to exercise, or the useful life of the underlying hosted software. We do not expect that adoption of this standard will have a material impact on our results of operations, cash flows or consolidated financial position. Not Yet Adopted as of March 31, 2019 ASU 2016 – 13 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 January 1, 2020. The Company is evaluating the impact the standard will have on its consolidated financial statements and related disclosures. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. Revenue In accordance with Topic 606, revenue is recognized when, or as, performance obligations are satisfied as defined by the terms of the contract, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for goods or services provided. The vast majority of the Company’s Topic 606 revenue is derived from stand-ready commitments 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 months ended March 31, 2019 and 2018 was not material. 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 Topic 310, Receivables . In addition, gains on sale of WEX Latin America receivables are included in other revenue and are within the scope of ASC 860, Transfers and Servicing . 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. See Note 18, Segment Information, for further information. The following table disaggregates our consolidated revenue for the three months ended March 31, 2019 : Three Months Ended March 31, 2019 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Topic 606 revenues Payment processing revenue $ 107,408 $ 59,998 $ 19,392 $ 186,798 Account servicing revenue 6,800 10,585 37,262 54,647 Other revenue 16,986 1,105 6,776 24,867 Total Topic 606 revenues $ 131,194 $ 71,688 $ 63,430 $ 266,312 Non-Topic 606 revenues Account servicing revenue $ 32,439 $ — $ — $ 32,439 Finance fee revenue 45,864 357 152 46,373 Other revenue 23,285 9,603 3,864 36,752 Total non-Topic 606 revenues $ 101,588 $ 9,960 $ 4,016 $ 115,564 Total revenues $ 232,782 $ 81,648 $ 67,446 $ 381,876 The following table disaggregates our consolidated revenue for the three months ended March 31, 2018 : Three Months Ended March 31, 2018 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Topic 606 revenues Payment processing revenue $ 106,978 $ 44,777 $ 16,699 $ 168,454 Account servicing revenue 8,466 9,469 27,025 44,960 Other revenue 17,042 1,117 8,142 26,301 Total Topic 606 revenues $ 132,486 $ 55,363 $ 51,866 $ 239,715 Non-Topic 606 revenues Account servicing revenue $ 33,744 — — $ 33,744 Finance fee revenue 43,604 259 5,018 48,881 Other revenue 20,531 11,157 — 31,688 Total non-Topic 606 revenues $ 97,879 $ 11,416 $ 5,018 $ 114,313 Total revenues $ 230,365 $ 66,779 $ 56,884 $ 354,028 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 do not exist between all parties involved in the process. 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 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. The Company determined that WEX does not control the services performed by merchant acquirers, card networks, sponsor banks and online bill payment aggregators 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. If such fee rebates constitute consideration payable to a customer or to another party that purchases services from the customer, they are considered variable consideration and are recorded as a reduction in payment processing revenue in the same period that the related interchange income is recognized. For the three months ended March 31, 2019 and 2018 , such variable consideration totaled $198.7 million and $198.5 million , respectively. Certain other fee rebates that constitute costs to obtain a contract 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. Additionally, account servicing revenue includes other fees recognized as revenue when assessed to the cardholder as part of the lending relationship, which is outside the scope of Topic 606. The Company also recognizes account servicing revenue related to reporting services on telematics hardware placements and permit sales to our over-the-road fleet customer base, both of which are within the scope of Topic 606. In our Travel and Corporate Solutions segment, account servicing primarily consists of licensing fees for the use of our accounts receivable and accounts payable SaaS platforms. In our Health and Employee Benefit Solutions segment, we recognize account servicing fees for the per-participant per-month fee charged 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 Travel and Corporate Solutions and Health and Employee Benefit Solutions segments provide SaaS services and support, which are stand-ready commitments and are satisfied over time in a series of daily increments. Revenue is recognized based on an output method 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. These waived fees amounted to $4.5 million and $4.4 million during the three months ended March 31, 2019 and 2018 , respectively. Finance fee revenue includes amounts earned by the Company’s factoring business, which purchases accounts receivable from third parties at a discount. Through June 2018, the Company also recognized finance fee revenue earned on the Company’s foreign salary advance product. Subsequently, the Company revised its WEX Latin America securitized debt agreement and recognizes gains on the sale of these receivables within “Other revenue” below. See Note 10, Off-Balance Sheet Arrangements, for further information on our WEX Latin America securitization. Other Revenue Other revenue includes transaction processing revenue, professional services including software development projects and other services sold subsequent to the core offerings, and the sales of telematics hardware, all of which are within the 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) and gains on sale of WEX Latin America receivables are included in other revenue. This revenue is outside the scope of Topic 606 and is recognized upon completion of the related service or the sale date of the receivables. 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. 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 balances. (In thousands) Contract balance Location on the unaudited condensed consolidated balance sheets March 31, 2019 December 31, 2018 Receivables 1 Accounts receivable, net $ 41,092 $ 32,949 Contract assets Prepaid expenses and other current assets $ 5,576 $ 3,819 Contract assets Other assets $ 20,280 $ 19,232 Contract liabilities Other current liabilities $ 6,594 $ 7,612 1 The majority of the Company’s receivables, which are 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 Topic 606. In the three months ended March 31, 2019 , we recognized revenue of $2.8 million related to contract liabilities at December 31, 2018. In the three months ended March 31, 2018 , revenue recognized related to contract liabilities at January 1, 2018 was immaterial. Remaining Performance Obligations The Company’s unsatisfied, or partially unsatisfied performance obligations as of March 31, 2019 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. The following table includes revenue expected to be recognized related to remaining performance obligations at the end of the reporting period. (In thousands) Remaining 2019 2020 2021 2022 2023 2024 Total Minimum monthly fees 1 $ 45,776 $ 40,285 $ 23,227 $ 12,313 $ 3,753 $ 639 $ 125,993 Professional services 2 11,655 515 — — — — 12,170 Total remaining performance obligations $ 57,431 $ 40,800 $ 23,227 $ 12,313 $ 3,753 $ 639 $ 138,163 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. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Asset Acquisition In December 2016, the Company entered into a contract with Chevron to issue and operate branded commercial fleet cards commencing in 2018. During October 2018, the Company entered into a definitive asset purchase agreement to acquire Chevron’s existing trade accounts receivable and customer portfolio from a third party for approximately $223.4 million , of which a portion will be paid during 2019. During 2018, the consideration paid consisted of approximately $162.8 million to acquire the customer portfolio, with $38.9 million paid into escrow for the carrying value of a portion of the accounts receivable at the date of purchase. As of March 31, 2019 , the deposits for the customer portfolio and accounts receivable are recorded in other assets and prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets, respectively. During the second quarter of 2019, when the Company obtains control of the customer portfolio and the customer accounts are converted onto the Company’s payment processing platform, the amounts will be reclassified to other intangible assets and accounts receivable, respectively. We will account for this transaction under the asset acquisition method of accounting. Concurrently with entering into the asset purchase agreement, we modified a number of contract terms, including extending the term of Chevron’s agreement, which is the period that we will use to amortize the other intangible asset on a straight-line basis. Transaction costs related to the acquisition were insignificant and expensed as incurred. Business Acquisitions In both the three months ended March 31, 2019 and 2018, the acquisition and merger related costs related to completed business combinations were immaterial. Discovery Benefits, Inc. On March 5, 2019, the Company acquired Discovery Benefits, an employee benefits administrator, for a total purchase price of $525.6 million , including $50 million which is payable in January 2020. The acquisition was primarily funded with cash on hand and through borrowings under the 2016 Credit Agreement. The seller of Discovery Benefits obtained a 4.9 percent equity interest in the U.S. Health business. The fair value of the equity interest was determined to be $100.0 million on the acquisition date. See Note 12, Redeemable Non-Controlling Interest, for further information. This acquisition has been accounted for as a business combination, with preliminary goodwill reflecting the comprehensive suite of products and services for our partners and customers and opening go-to-market channels to include consulting firms and brokers in our Health and Employee Benefit Solutions segment. The majority of the goodwill associated with this acquisition is deductible for tax purposes. The following is a summary of the preliminary allocation of the purchase price to the assets and liabilities acquired, based on the estimated fair value at the date of acquisition: (In thousands) Cash consideration, net of cash and restricted cash acquired of $125,865 $ 249,781 Fair value of redeemable non-controlling interest 100,000 Deferred cash consideration 50,000 Total consideration, net of cash and restricted cash acquired $ 399,781 Less: Accounts receivable 10,367 Property and equipment 4,904 Customer relationships (a)(d) 213,600 Developed technologies (b)(d) 38,900 Trademarks and trade names (c)(d) 13,800 Other assets 13,589 Accounts payable (3,024 ) Accrued expenses (7,399 ) Restricted cash payable (125,346 ) Deferred income taxes (22,200 ) Other liabilities (10,015 ) Recorded goodwill $ 272,605 (a) Weighted average life - 7.3 years . (b) Weighted average life - 5.4 years . (c) Weighted average life - 7.3 years . (d) The weighted average life of all amortizable intangible assets acquired in this business combination is 7.0 years . Since the acquisition date, DBI has contributed $8.6 million in total revenues and $1.1 million income before income taxes to Company operations. Noventis, Inc. On January 24, 2019, the Company acquired Noventis, a long-time customer and electronic payments network focused on optimizing payment delivery for bills and invoices to commercial entities, for $343.1 million , which was primarily funded with cash on hand and through borrowings under the 2016 Credit Agreement. Excluded from the consideration is $5.6 million paid to certain Noventis shareholders who held unvested option awards at the acquisition date. The modification of these awards to accelerate the vesting resulted in the Company recording this expense as general and administrative expense in our unaudited condensed consolidated statement of income. This acquisition, which expands our reach as a corporate payments supplier and provides more channels to billing aggregators and financial institutions in our Travel and Corporate Payment Solutions segment, was accounted for as a business combination, resulting in the recording of goodwill. The goodwill associated with this acquisition is not deductible for tax purposes. The following is a summary of the preliminary allocation of the purchase price to the assets and liabilities acquired, based on the estimated fair value at the date of acquisition: (In thousands) Total consideration, net of cash and restricted cash acquired of $51,538 $ 291,564 Less: Accounts receivable 23,002 Property and equipment 549 Network relationships (a) (c) 100,900 Developed technologies (b) (c) 15,000 Other assets 2,487 Accounts payable (36,794 ) Deferred income tax liabilities (24,121 ) Other liabilities (2,518 ) Recorded goodwill $ 213,059 (a) Weighted average life - 8.3 years . (b) Weighted average life - 2.9 years . (c) The weighted average life of all amortizable intangible assets acquired in this business combination is 7.6 years . Since the acquisition date, Noventis has contributed $9.2 million in total revenues and $1.8 million loss before income taxes to Company operations. Pavestone Capital, LLC On February 14, 2019, the Company acquired Pavestone Capital, a recourse factoring company that provides working capital to businesses, for a purchase price of $28.1 million , subject to net working capital adjustments. This acquisition, which has been accounted for as a business combination, complements our existing factoring business and as a result the purchase price is primarily allocated to goodwill and accounts receivable in amounts of $12.8 million and $14.6 million , respectively. The goodwill associated with this acquisition is deductible for tax purposes. Since the acquisition date, Pavestone Capital revenues and income before income taxes, which are recorded in our Fleet Solutions segment, were not material to Company operations. No pro forma information has been included in these financial statements as the operations of Pavestone Capital 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. The Company has not finalized the purchase accounting for Discovery Benefits, Noventis or Pavestone and is currently evaluating the tax basis and allocation of the net assets acquired. Additionally, the Company is performing a valuation of intangible assets acquired in the business combinations. The preliminary estimates could change significantly upon completion of these valuations. Pro Forma Supplemental Information The pro forma information below gives effect to the Discovery Benefits and Noventis acquisitions as if they had been completed on January 1, 2018. These pro forma results have been calculated after applying the Company’s accounting policies, adjustments to reflect amortization associated with intangibles acquired and interest expense associated with the incremental borrowings under the 2016 Credit Agreement used to fund the acquisition and related income tax results. The pro forma financial information is presented for comparative purposes only, based on certain estimates and assumptions, which the Company believes to be reasonable but not necessarily indicative of future results of operations or the results that would have been reported if the acquisitions had been completed on January 1, 2018. The following represents unaudited pro forma operational results as if the acquisitions had occurred January 1, 2018: Three Months Ended March 31, 2019 2018 Total revenues $ 400,982 $ 381,826 Net income attributable to shareholders $ 18,810 $ 42,487 Net income attributable to WEX Inc. per share: Basic $ 0.44 $ 0.99 Diluted $ 0.43 $ 0.98 GO Fuel Card On March 26, 2019, the Company entered into an agreement to acquire Go Fuel Card, a European fuel card business, for a total purchase price of €235.0 million (equivalent of $265.5 million on date of agreement). We expect that this acquisition will strengthen our position in the European market and reduce our sensitivity to retail fuel prices. This transaction is expected to close late in the second quarter or early in the third quarter of 2019, subject to regulatory approvals and other customary closing conditions. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2019 | |
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, which are subject to interest charges based on the revolving balance not paid in full. The Company had approximately $43.0 million and $18.9 million in receivables with revolving credit balances as of March 31, 2019 and December 31, 2018 , respectively. The increase in revolving credit balances during the three months ended March 31, 2019 was due to the onboarding of a significant customer portfolio. 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 March 31, 2019 or December 31, 2018 . 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 March 31, 2019 December 31, 2018 29 days or less past due 96 % 95 % 59 days or less past due 98 % 98 % 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 primarily 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: Three Months Ended March 31, (In thousands) 2019 2018 Balance, beginning of year $ 46,948 $ 33,387 Provision for credit losses 17,791 14,226 Charges to other accounts 1 4,533 4,442 Charge-offs (24,800 ) (19,221 ) Recoveries of amounts previously charged-off 2,215 1,926 Currency translation 55 99 Balance, end of period $ 46,742 $ 34,859 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 | 3 Months Ended |
Mar. 31, 2019 | |
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 (“DSUs”) 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 and assumed issuance of unvested performance-based awards 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 March 31, (In thousands) 2019 2018 Net income attributable to shareholders $ 16,134 $ 51,970 Weighted average common shares outstanding – Basic 43,220 43,049 Dilutive impact of share-based compensation awards 352 401 Weighted average common shares outstanding – Diluted 43,572 43,450 For the three months ended March 31, 2019 and March 31, 2018 , 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 | 3 Months Ended |
Mar. 31, 2019 | |
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. As of December 31, 2018 we had four interest rate swap contracts in effect with a notional amount at inception collectively of $1.0 billion , with maturity dates from December 30, 2020 to December 31, 2022, at interest rates between 1.108 percent and 2.212 percent . On March 12, 2019, the Company entered into three additional interest rate swap contracts. The following table presents the notional amounts, fixed interest rates and maturities of the interest rate swap agreements entered into during the three months ended March 31, 2019 : Tranche A Tranche B Tranche C Notional amount at inception (in thousands) $150,000 $100,000 $200,000 Maturity date 3/12/2022 3/12/2022 3/12/2023 Fixed interest rate 2.41750% 2.42500% 2.41325% Collectively, as of March 31, 2019 , these outstanding interest rate swap contracts are intended to fix the future interest payments associated with $1.5 billion of our variable rate borrowings. At March 31, 2019 , we had variable-rate borrowings of $2.4 billion under our 2016 Credit Agreement. The following table presents information on the location and amounts of interest rate swap gains and losses: (In thousands) Three Months Ended March 31, Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income Statement 2019 2018 Interest rate swap agreements – unrealized portion Net unrealized (loss) gain on financial instruments $ (12,209 ) $ 13,508 Interest rate swap agreements – realized portion Financing interest income $ 2,116 $ 313 See Note 11, Fair Value, for more information regarding the valuation of the Company’s interest rate swaps. |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2019 | |
Banking and Thrift [Abstract] | |
Deposits | 8. Deposits WEX Bank has issued certificates of deposit with maturities ranging from one year to five years, with interest rates ranging from 1.30 percent to 3.52 percent as of both March 31, 2019 and December 31, 2018. WEX Bank may issue brokered deposits, subject to FDIC rules governing minimum financial ratios, which include risk-based asset and capital requirements. As of March 31, 2019 , 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 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, customer deposits and certificates of deposit with maturities within one year are classified as short-term deposits on our unaudited condensed consolidated balance sheets. WEX Bank is required to maintain reserves against a percentage of certain customer deposits by keeping balances with the Federal Reserve Bank. The required reserve based on the outstanding customer deposits was $11.2 million and $11.1 million at March 31, 2019 and December 31, 2018 , respectively. The following table presents the composition of deposits: (In thousands) March 31, 2019 December 31, 2018 Interest-bearing brokered money market deposits $ 238,940 $ 283,790 Customer deposits 128,402 138,072 Certificates of deposit with maturities within 1 year (a) 467,996 505,582 Short-term deposits 835,338 927,444 Certificates of deposit with maturities greater than 1 year and less than 5 years (a) 300,349 345,231 Total deposits $ 1,135,687 $ 1,272,675 Weighted average cost of funds on certificates of deposit outstanding 2.40 % 2.36 % Weighted average cost of interest-bearing brokered money market deposits 2.55 % 2.49 % (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 ICS Purchases 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. There were no outstanding balances for ICS purchases at March 31, 2019 and December 31, 2018. |
Financing and Other Debt
Financing and Other Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Financing and Other Debt | 9. Financing and Other Debt The following table summarizes the Company’s total outstanding debt: (In thousands) March 31, 2019 December 31, 2018 Revolving line-of-credit facility under 2016 Credit Agreement (a) $ 169,206 $ — Term loans under 2016 Credit Agreement (a) 2,279,213 1,745,084 Notes outstanding (a) 400,000 400,000 Securitized debt 105,932 106,872 Participation debt 55,677 114,849 Borrowed federal funds 591 — WEX Latin America debt 17,052 16,242 Total gross debt $ 3,027,671 $ 2,383,047 Current portion of gross debt $ 192,736 $ 223,241 Less: Unamortized debt issuance costs (8,379 ) (6,724 ) Short-term debt, net $ 184,357 $ 216,517 Long-term gross debt $ 2,834,935 $ 2,159,806 Less: Unamortized debt issuance costs (25,574 ) (25,883 ) Long-term debt, net $ 2,809,361 $ 2,133,923 Supplemental information under 2016 Credit Agreement: Letters of credit (b) $ 53,534 $ 53,514 Borrowing capacity on revolving credit facility (c) $ 547,260 $ 666,486 (a) See Note 11, Fair Value, for more information regarding the Company’s 2016 Credit Agreement and Notes. (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 As of December 31, 2018, the 2016 Credit Agreement, as amended, provided for a secured tranche A term loan in an original principal amount of $480.0 million , a secured tranche B term loan in an original principal amount of $1,335.0 million and a $720.0 million secured revolving credit facility, with a $250.0 million sublimit for letters of credit and $20.0 million sublimit for swingline loans. Under the 2016 Credit Agreement, the Company has granted a security interest in substantially all of the assets of the Company, subject to exceptions including the assets of WEX Bank and certain foreign subsidiaries. On January 18, 2019, the Company entered into a Fifth Amendment to the 2016 Credit Agreement, which provided additional tranche A term loans in the principal amount of $300 million , increasing the outstanding principal on the tranche A term loans to $723.7 million as of such date. In addition, subject to certain conditions, the Fifth Amendment provided delayed draw commitments for an incremental $275.0 million tranche A term loan and an incremental $25.0 million of revolving credit commitments (subject to conversion of the delayed draw incremental tranche A term loan commitments and incremental revolving credit commitments to commitments of the other type). On March 5, 2019, the Company drew down this commitment in order to fund the acquisition of Discovery Benefits, consisting of $250.0 million of tranche A term loans and an incremental $50.0 million of revolving credit commitments. Amounts due under the 2016 Credit Agreement mature in July 2023, subject to earlier maturity as more fully described below. Prior to maturity, amounts borrowed under the credit facility will be reduced by mandatory quarterly payments of $12.5 million and $3.4 million for tranche A and tranche B term loan facilities, respectively. The revolving loans and tranche A loans outstanding under the 2016 Credit Agreement bear interest at variable rates, at the Company’s option, plus an applicable margin determined based on the Company’s consolidated leverage ratio. The tranche B loans bear interest at a variable rate plus a margin equal to 2.25 percent for base rate loans and 1.25 percent for eurocurrency rate loans. As of March 31, 2019 and December 31, 2018, amounts outstanding under the 2016 Credit Agreement bore a weighted average effective interest rate of 4.6 percent and 4.7 percent , respectively. 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. The Company accounted for the January 2019 Credit Agreement amendment as a debt modification. As part of this transaction, the Company incurred and expensed $4.4 million of third party costs, which are classified within general and administrative expenses in our unaudited condensed consolidated statements of income. In addition, the Company incurred and capitalized $3.4 million of lender costs associated with the January 2019 debt amendment. These debt issuance costs are being amortized into interest expense over the 2016 Credit Agreement’s term using the effective interest method. Debt Covenants As more fully described in the Company’s Annual Report on Form 10 – K for the year ended December 31, 2018, 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 March 31, 2019, the Company was in compliance with all material covenants of its 2016 Credit Agreement and the Indenture. Notes Outstanding As of both March 31, 2019 and December 31, 2018 , the Company had $400.0 million of 4.75 percent 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. Australian Securitization Facility The Company maintains a securitized debt agreement with the Bank of Tokyo-Mitsubishi UFJ, Ltd., which expires April 2019. Subsequent to March 31, 2019, this agreement was extended through April 2020. 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 2.90 percent and 2.89 percent as of March 31, 2019 and December 31, 2018 , respectively. The Company had $78.7 million and $87.0 million of securitized debt under this facility as of March 31, 2019 and December 31, 2018 , respectively. 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 is determined by management on a monthly basis. The interest rate was 0.87 percent and 0.98 percent as of March 31, 2019 and December 31, 2018 , respectively. The Company had $26.4 million and $18.0 million of securitized debt under this facility as of March 31, 2019 and December 31, 2018 , respectively. Participation Debt From time to time, WEX Bank enters into participation agreements with third-party banks to fund customers’ balances that exceed WEX Bank’s lending limit to individual customers. Associated unsecured borrowings carry a variable interest rate of 1 month to 3 month LIBOR plus a margin of 225 basis points. The following table provides the amounts outstanding under the participation debt agreements in place: March 31, 2019 December 31, 2018 (In thousands) Amounts Outstanding Remaining Funding Capacity Amounts Outstanding Remaining Funding Capacity Short-term debt, net (a) $ 5,677 $ 124,323 $ 64,849 $ 65,151 Long-term debt, net (b) $ 50,000 $ — $ 50,000 $ — Average interest rate 4.85 % 4.30 % (a) Amounts outstanding under agreements terminating on June 30, 2019 and on demand. (b) Amounts outstanding under an agreement terminating on August 31, 2020. Borrowed Federal Funds WEX Bank borrows from uncommitted federal funds lines to supplement the financing of the Company’s accounts receivable. Our federal funds lines of credit were $327.4 million and $309.0 million as of March 31, 2019 and December 31, 2018 , respectively. As of March 31, 2019 there were outstanding borrowings of $0.6 million at an interest rate of 2.64 percent . There were no outstanding borrowings as of December 31, 2018 . WEX Latin America Debt WEX Latin America had debt of approximately $17.1 million and $16.2 million as of March 31, 2019 and December 31, 2018 , respectively. This is comprised of credit facilities and loan arrangements related to our accounts receivable. These borrowings are recorded in short-term debt, net on the Company’s unaudited condensed consolidated balance sheets. As of March 31, 2019 and December 31, 2018 , the interest rate was 24.74 percent and 23.59 percent , respectively. |
Off-Balance Sheet Arrangements
Off-Balance Sheet Arrangements | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Off-Balance Sheet Arrangements | 10. Off–Balance Sheet Arrangements 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 WEX Europe Services 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 $150.0 million and $170.2 million of receivables under this arrangement during the three months ended March 31, 2019 and March 31, 2018 , respectively. Proceeds received are recorded net of applicable expenses, interest and commissions. The loss on factoring was $0.8 million and $1.1 million for the three months ended March 31, 2019 and 2018, respectively, and was recorded within cost of services in the unaudited condensed consolidated statements of income. As of March 31, 2019 and December 31, 2018 , an immaterial amount of outstanding transferred receivables were in excess of the established credit limit. Charge-backs on balances in excess of the credit limit during the three months ended March 31, 2019 and during the three months ended March 31, 2018 were insignificant. WEX Bank Accounts Receivable Factoring In August 2018, WEX Bank entered into a receivables purchase agreement with an unrelated third-party financial institution to sell certain of our trade receivables under non-recourse transactions. WEX Bank continues to service the receivables post-transfer with no participating interest. The Company obtained a true-sale opinion from an independent attorney, which states that the factoring agreement provides legal isolation upon WEX Bank bankruptcy or receivership under local law. As such, transfers under this arrangement are treated as a sale and are accounted for as a reduction in trade receivables because the agreements transfer effective control of the receivables to the buyer. The Company sold approximately $2.0 billion of receivables under this arrangement during the three months ended March 31, 2019 . Proceeds from the sale, which are reported net of a negotiated discount rate, are recorded in operating activities within the Company’s unaudited condensed consolidated statement of cash flows. The loss on factoring was $0.6 million for the three months ended March 31, 2019 and was recorded within cost of services in the unaudited condensed consolidated statements of income. WEX Latin America Securitization of Receivables During the second quarter of 2017, WEX Latin America entered into a securitized debt agreement to transfer certain unsecured receivables associated with our salary payment card product to an investment fund managed by an unrelated third-party financial institution. WEX Latin America holds a non-controlling equity interest in the investment fund. During the three months ended March 31, 2019 , the Company did not make equity contributions to the investment fund. As of December 31, 2017 and through June 30, 2018, this securitization arrangement did not meet the derecognition conditions due to continuing involvement with the transferred assets and accordingly WEX Latin America reported the transferred receivables and securitized debt on our unaudited condensed consolidated balance sheets. During the three months ended March 31, 2018, the Company recognized approximately $2.1 million of operating interest expense under this financing arrangement. During the third quarter of 2018, the securitization agreements were amended, resulting in the Company giving up effective control of the transferred receivables to the buyer. Additionally, the Company received a true-sale opinion from an independent attorney stating that the amended agreements provide legal isolation upon WEX Latin America bankruptcy or receivership under local law. As such, transfers under this arrangement are treated as a sale and are accounted for as a reduction in trade receivables. During the three months ended March 31, 2019 , the Company sold $20.7 million of receivables and recognized a $3.7 million gain on sale, consisting of the difference between the sales price and the carrying value of the receivables, which is recorded within other revenue in our unaudited condensed consolidated statement of income. Cash proceeds from the transfer of these receivables is reflected as an operating activity within our unaudited condensed consolidated statement of cash flows. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 11. Fair Value The Company holds mortgage-backed securities, fixed-income securities, money market funds, 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 months ended March 31, 2019 or March 31, 2018 . Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the Company’s financial instruments that are measured at fair value: (In thousands) Fair Value Hierarchy March 31, 2019 December 31, 2018 Financial Assets: Money market funds (a) 1 $ 5,991 $ 71,228 Investment securities Municipal bonds 2 $ 334 $ 404 Asset-backed securities 2 271 279 Mortgage-backed securities 2 268 260 Fixed-income mutual fund 1 23,899 23,463 Total investment securities $ 24,772 $ 24,406 Executive deferred compensation plan trust (b) 1 $ 7,585 $ 6,398 Interest rate swaps (c) 2 $ 10,805 $ 17,994 Liabilities Interest rate swaps (d) 2 $ 5,020 $ — (a) The fair value is recorded in cash and cash equivalents. (b) The fair value is recorded in prepaid expenses and other current assets and other assets based on the timing of payment obligations. (c) The fair value 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 is recorded in other current liabilities or other liabilities depending on the timing of expected discounted cash flows. Money Market Funds A portion of the Company’s cash and cash equivalents are invested in a money market fund that primarily consists of short-term government securities, which are classified as Level 1 in the fair value hierarchy because they are valued using quoted market prices in an active market. 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 investments held in the executive 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. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Notes Outstanding The Notes outstanding had a fair value of $399.0 million and $392.0 million as of March 31, 2019 and December 31, 2018 , 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 March 31, 2019 and December 31, 2018 , the carrying value of the 2016 Credit Agreement approximated its fair value. Other Assets and Liabilities Our financial instruments, other than those presented above, include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities. The carrying values of such assets and liabilities approximate their respective fair values due to their short-term nature. The carrying values of certificates of deposit, interest-bearing brokered 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. |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interest | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Non-Controlling Interest | 12. Redeemable Non-Controlling Interest On March 5, 2019, the Company acquired Discovery Benefits, an employee benefits administrator. The seller of Discovery Benefits obtained a 4.9 percent equity interest in the newly formed parent company of WEX Health and Discovery Benefits (“the U.S. Health business”). The seller’s 4.9 percent non-controlling interest in WEX Health and DBI was initially established at carrying value and fair value, respectively. On the date of acquisition, the excess of the fair value of the 4.9 percent equity interest in WEX Health over its carrying value was recognized as an equity transaction, resulting in a $41.4 million increase to additional paid-in capital. The agreement provides the seller with a put right and the Company with a call right for the equity interest, which can be exercised no earlier than five and seven years following the date of acquisition, respectively. Upon exercise of the put or call right, the purchase price is calculated based on a revenue multiple of peer companies (as defined in the agreement) applied to trailing twelve month revenues of the U.S. Health business. The put option makes the non-controlling interest redeemable and, therefore, the non-controlling interest is classified as temporary equity outside of stockholders’ equity. The redeemable non-controlling interest is reported at the higher of its redemption value or the non-controlling interest holder’s proportionate share of the U.S. Health business’ net carrying value. Subsequent remeasurement of the equity interest to fair value resulted in an increase to redeemable non-controlling interest of $41.4 million and an offsetting decrease to retained earnings that did not impact earnings per share. As of March 31, 2019, the carrying amount for this redeemable non-controlling interest was greater than the redemption value, resulting in no adjustment to reflect the non-controlling interest at redemption value. Subsequent increases or decreases in the redemption value of the non-controlling interest will be offset against retained earnings and impact earnings per share. The following table presents the changes in the Company’s redeemable non-controlling interest: (In thousands) Three months ended March 31, 2019 Balance, beginning of period $ — Acquisition of Discovery Benefits at fair value 25,757 Establishing redeemable non-controlling interest for WEX Health at carrying value 32,843 Adjustment to redeemable non-controlling interest to reflect WEX Health at fair value 41,400 Net loss attributable to redeemable non-controlling interest (7 ) Balance, end of period $ 99,993 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes The Company’s effective tax rate was 26.4 percent for the first quarter of 2019 as compared to 25.2 percent for the first quarter of 2018. The increase in our tax rate was primarily due to the increase in unrecognized tax benefits in 2019. While our accounting for the impact of the 2017 Tax Cut and Jobs Act (“TCJA”) as of December 31, 2018 was deemed to be complete, amounts recorded were based on prevailing regulations and available information as of December 31, 2018. Additional guidance issued by the Internal Revenue Service (“IRS”) may continue to impact our recorded amounts after December 31, 2018. Undistributed earnings of certain foreign subsidiaries of the Company amounted to $77.0 million and $64.9 million at March 31, 2019 and December 31, 2018 , respectively. These earnings and profits are considered to be indefinitely reinvested. Upon distribution of these earnings in the form of dividends or otherwise, the Company would be subject to withholding taxes payable, where applicable, to foreign countries, but would have no further federal income tax liability. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | 14. Leases We have operating leases for buildings, primarily for office space. For building leases with terms greater than twelve months, we account for lease and non-lease components as a single lease component. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Short-term lease payments are recognized on a straight-line basis and variable short-term lease payments are recognized in the period in which the obligation is incurred. We determine whether or not a contract contains a lease at inception of the contract. Many of our lease agreements contain renewal or termination clauses that we factor into our determination of the lease term if we are reasonably certain to exercise any such options. The following table presents supplemental balance sheet information related to our leases: (In thousands) Balance Sheet Location March 31, 2019 Assets Operating lease ROU assets Other assets $ 80,806 Liabilities Current operating lease liabilities Other current liabilities 12,135 Non-current operating lease liabilities Other liabilities 80,320 Total lease liabilities $ 92,455 The following table presents the weighted average remaining lease term and discount rate: Operating leases March 31, 2019 Weighted average remaining term (in years) 8.7 Weighted average discount rate 4.6 % The following table presents the maturities of our lease liabilities: (In thousands) March 31, 2019 Remaining 2019 $ 12,070 2020 15,275 2021 14,810 2022 13,420 2023 11,238 2024 and thereafter 47,688 Total lease payments $ 114,501 Less: Imputed interest 22,046 Total lease obligations $ 92,455 Less: Current portion of lease obligations 12,135 Long-term lease obligations $ 80,320 In addition to the total lease obligations presented in the table above, we have a 14 year building operating lease with undiscounted payment obligations of $30.0 million that is expected to commence during 2020. We recognized $4.0 million of operating lease expense during the three months ended March 31, 2019, which includes immaterial short-term leases and variable lease costs. These amounts are classified as general and administrative expense on our unaudited condensed consolidated statements of income. The following table presents supplemental cash flow and other information related to our leases: (In thousands) March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,075 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 14,646 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. 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 March 31, 2019 are consistent with those discussed in Note 19, Commitments and Contingencies, to the consolidated financial statements in the Annual Report on Form 10–K for the year ended December 31, 2018 . |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 16. Stock–Based Compensation The fair value of restricted stock units (“RSUs”), DSUs, performance-based restricted stock units (“PBRSUs”) and service-based stock options awarded during the three months ended March 31, 2019 totaled $38.1 million , as compared to $27.4 million for the three months ended March 31, 2018 . 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. The table below presents the weighted average fair value of service-based stock options by year of grant and the assumptions used in estimating those fair values: 2019 2018 Weighted average fair value $ 58.28 $ 51.27 Weighted average expected life (in years) 6.0 6.0 Weighted average exercise price $ 184.81 $ 158.23 Expected stock price volatility 27.21 % 27.35 % Risk-free interest rate 2.37 % 2.69 % |
Restructuring Activities
Restructuring Activities | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | 17. Restructuring Activities 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”). Total restructuring charges incurred to date under these initiatives, which primarily consisted of employee costs and office closure costs, were $24.8 million as of March 31, 2019 . Restructuring charges incurred during the three months ended March 31, 2019 and 2018 were immaterial. Based on current plans, which are subject to change, the Company does not expect to incur any material charges under these initiatives. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | 18. Segment Information The Company determines its operating segments and reports information in accordance with how the Company’s chief operating decision maker (“CODM”) allocates resources and assesses performance. The Company’s CODM is its Chief Executive Officer. The operating segments are aggregated into the three reportable segments described below. • Fleet Solutions primarily 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 revenues: Three Months Ended March 31, 2019 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Revenues Payment processing revenue $ 107,408 $ 59,998 $ 19,392 $ 186,798 Account servicing revenue 39,239 10,585 37,262 87,086 Finance fee revenue 45,864 357 152 46,373 Other revenue 40,271 10,708 10,640 61,619 Total revenues $ 232,782 $ 81,648 $ 67,446 $ 381,876 Interest income $ 2,221 $ 377 $ 159 $ 2,757 Three Months Ended March 31, 2018 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Revenues Payment processing revenue $ 106,978 $ 44,777 $ 16,699 $ 168,454 Account servicing revenue 42,210 9,469 27,025 78,704 Finance fee revenue 43,604 259 5,018 48,881 Other revenue 37,573 12,274 8,142 57,989 Total revenues $ 230,365 $ 66,779 $ 56,884 $ 354,028 Interest income $ 995 $ 421 $ 5,967 $ 7,383 The CODM evaluates the financial performance of each segment using 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) unallocated corporate expenses. Additionally, we do not allocate foreign currency gains and losses, financing interest expense, unrealized and realized gains and losses on financial instruments, income taxes and net gains or losses from non-controlling interests to our operating segments. The following table reconciles segment adjusted operating income to income before income taxes: Three Months Ended March 31, (In thousands) 2019 2018 Segment adjusted operating income Fleet Solutions $ 92,975 $ 107,973 Travel and Corporate Solutions 34,387 25,249 Health and Employee Benefit Solutions 19,780 18,071 Total segment adjusted operating income $ 147,142 $ 151,293 Reconciliation: Total segment adjusted operating income $ 147,142 $ 151,293 Less: Unallocated corporate expenses 16,942 13,920 Acquisition-related intangible amortization 33,888 35,236 Other acquisition and divestiture related items 9,780 637 Debt restructuring costs 4,400 3,015 Stock-based compensation 10,442 8,955 Restructuring and other costs 2,755 5,671 Operating income 68,935 83,859 Financing interest expense (31,112 ) (27,337 ) Net foreign currency (loss) gain (3,885 ) 390 Net unrealized (loss) gain on financial instruments (11,912 ) 13,508 Income before income taxes $ 22,026 $ 70,420 |
Supplementary Regulatory Capita
Supplementary Regulatory Capital Disclosure | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Supplementary Regulatory Capital Disclosure | 19. 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 initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could limit our business activities and have a material effect on our business, results of operations and financial condition. Quantitative measures established by regulation to ensure capital adequacy require WEX Bank to maintain minimum amounts and ratios as defined in the regulations. As of March 31, 2019 , the most recent FDIC exam report categorized WEX Bank as “well capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events subsequent to that examination report that management believes have changed WEX Bank’s capital rating. The following table presents WEX Bank’s actual and regulatory minimum capital amounts and ratios: (In thousands) Actual Amount Ratio Minimum for Capital Adequacy Purposes Amount Ratio Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio March 31, 2019 Total Capital to risk-weighted assets $ 317,780 12.01 % $ 211,640 8.0 % $ 264,550 10.0 % Tier 1 Capital to average assets $ 302,413 10.92 % $ 110,746 4.0 % $ 138,432 5.0 % Common equity to risk-weighted assets $ 302,413 11.43 % $ 119,048 4.5 % $ 171,958 6.5 % Tier 1 Capital to risk-weighted assets $ 302,413 11.43 % $ 158,730 6.0 % $ 211,640 8.0 % December 31, 2018 Total Capital to risk-weighted assets $ 323,178 12.82 % $ 201,749 8.0 % $ 252,186 10.0 % Tier 1 Capital to average assets $ 305,734 10.88 % $ 112,401 4.0 % $ 140,501 5.0 % Common equity to risk-weighted assets $ 305,734 12.12 % $ 113,484 4.5 % $ 163,921 6.5 % Tier 1 Capital to risk-weighted assets $ 305,734 12.12 % $ 151,312 6.0 % $ 201,749 8.0 % |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 , filed with the SEC on March 18, 2019 and our Form 10–K/A filed with the SEC on March 20, 2019. 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 months ended March 31, 2019 are not necessarily indicative of the results for any future periods or the year ending December 31, 2019 . Effective January 1, 2019, the Company modified the presentation of the unaudited condensed balance sheets to separately classify its restricted cash payable. The prior period has been reclassified to conform with this presentation. There was no change to current liabilities as a result of this change. We apply the same accounting policies in preparing our quarterly and annual financial statements, with the exception of the new leasing standard which is required to be adopted on a prospective basis. Refer to Note 2, Recent Accounting Pronouncements, for more information. 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 Three Months Ended March 31, 2019 ASU 2016–02 This standard requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The Company adopted ASU 2016–02 effective January 1, 2019, using the modified retrospective approach, and all practical expedients permitted under the transition guidance. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016–02, Leases (Topic 842), which requires leases with a duration greater than twelve months to be recognized on the balance sheet as right-of-use (“ROU”) assets and lease liabilities. We adopted the new standard using the modified retrospective approach and have elected the package of practical expedients permitted under the transition guidance, including the hindsight practical expedients for expired or existing contracts, which allowed us to carryforward our historical determination of (i) whether a contract is or contains a lease, (ii) lease classification and (iii) initial direct costs. Additionally, we elected the practical expedients which allowed us to (i) not perform an allocation of lease and non-lease components for real estate leases, (ii) continue to account for short-term leases under Topic 840 and (iii) utilize our incremental borrowing rate (“IBR”), rather than the rate implicit in each lease, to calculate the present value of the remaining lease payments. As such, the unaudited condensed consolidated financial statements for the period ended March 31, 2019 are presented under the new standard, while comparative periods presented continue to be reported in accordance with Topic 840. The most significant impact of adoption was the recording of operating lease ROU assets and operating lease liabilities on our unaudited condensed consolidated balance sheets at January 1, 2019. Refer to Note 14, Leases, for more information. The standard did not materially impact our results of operations or cash flows. ASU 2018 – 15 This standard clarifies the accounting for capitalizing implementation costs in a cloud computing arrangement that is a service contract. The standard provides that implementation costs be treated using the same criteria used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. Effective January 1, 2019, the Company early adopted ASU 2018–15 on a prospective basis. Under the standard, we now capitalize implementation costs related to our cloud migration of technology platforms to the cloud. Such amounts are amortized over the lesser of the term of the hosting arrangement, considering any explicit renewal options for which we are reasonably certain to exercise, or the useful life of the underlying hosted software. We do not expect that adoption of this standard will have a material impact on our results of operations, cash flows or consolidated financial position. Not Yet Adopted as of March 31, 2019 ASU 2016 – 13 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 January 1, 2020. 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, which are subject to interest charges based on the revolving balance not paid in full. |
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 (“DSUs”) 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 and assumed issuance of unvested performance-based awards 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 |
Fair Value of Financial Instruments | The Company holds mortgage-backed securities, fixed-income securities, money market funds, 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. 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. 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. 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. |
Leases | We have operating leases for buildings, primarily for office space. For building leases with terms greater than twelve months, we account for lease and non-lease components as a single lease component. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Short-term lease payments are recognized on a straight-line basis and variable short-term lease payments are recognized in the period in which the obligation is incurred. We determine whether or not a contract contains a lease at inception of the contract. Many of our lease agreements contain renewal or termination clauses that we factor into our determination of the lease term if we are reasonably certain to exercise any such options. |
Segment Information | The Company determines its operating segments and reports information in accordance with how the Company’s chief operating decision maker (“CODM”) allocates resources and assesses performance. The Company’s CODM is its Chief Executive Officer. The operating segments are aggregated into the three reportable segments described below. • Fleet Solutions primarily 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. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The effects of the Revision on our unaudited condensed consolidated statements of income and cash flows were as follows: Three months ended March 31, 2018 (In thousands, except per share data) As Previously Reported Brazil Adjustments Other Immaterial Adjustments As Revised Total revenues $ 354,829 $ (801 ) $ — $ 354,028 Processing costs $ 79,640 $ (6,534 ) $ — $ 73,106 Provision for credit losses $ 13,990 $ 236 $ — $ 14,226 Operating income $ 78,362 $ 5,497 $ — $ 83,859 Income taxes $ 15,589 $ 2,343 $ (183 ) $ 17,749 Net income $ 49,334 $ 3,154 $ 183 $ 52,671 Net income attributable to shareholders $ 48,633 $ 3,154 $ 183 $ 51,970 Net income attributable to WEX Inc. per share Basic $ 1.13 $ 0.08 $ — $ 1.21 Diluted $ 1.12 $ 0.08 $ — $ 1.20 Three months ended March 31, 2018 (In thousands) As Previously Reported Brazil Adjustments Other Immaterial Adjustments As Revised Net cash provided by operating activities $ 85,243 $ — $ 2,563 $ 87,806 Effect of exchange rates on cash, cash equivalents and restricted cash $ (2,577 ) $ — $ 1,990 $ (587 ) Cash, cash equivalents and restricted cash, beginning of period $ 526,938 $ — $ (4,553 ) $ 522,385 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 three months ended March 31, 2019 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 Three Months Ended March 31, 2019 ASU 2016–02 This standard requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The Company adopted ASU 2016–02 effective January 1, 2019, using the modified retrospective approach, and all practical expedients permitted under the transition guidance. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016–02, Leases (Topic 842), which requires leases with a duration greater than twelve months to be recognized on the balance sheet as right-of-use (“ROU”) assets and lease liabilities. We adopted the new standard using the modified retrospective approach and have elected the package of practical expedients permitted under the transition guidance, including the hindsight practical expedients for expired or existing contracts, which allowed us to carryforward our historical determination of (i) whether a contract is or contains a lease, (ii) lease classification and (iii) initial direct costs. Additionally, we elected the practical expedients which allowed us to (i) not perform an allocation of lease and non-lease components for real estate leases, (ii) continue to account for short-term leases under Topic 840 and (iii) utilize our incremental borrowing rate (“IBR”), rather than the rate implicit in each lease, to calculate the present value of the remaining lease payments. As such, the unaudited condensed consolidated financial statements for the period ended March 31, 2019 are presented under the new standard, while comparative periods presented continue to be reported in accordance with Topic 840. The most significant impact of adoption was the recording of operating lease ROU assets and operating lease liabilities on our unaudited condensed consolidated balance sheets at January 1, 2019. Refer to Note 14, Leases, for more information. The standard did not materially impact our results of operations or cash flows. ASU 2018 – 15 This standard clarifies the accounting for capitalizing implementation costs in a cloud computing arrangement that is a service contract. The standard provides that implementation costs be treated using the same criteria used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. Effective January 1, 2019, the Company early adopted ASU 2018–15 on a prospective basis. Under the standard, we now capitalize implementation costs related to our cloud migration of technology platforms to the cloud. Such amounts are amortized over the lesser of the term of the hosting arrangement, considering any explicit renewal options for which we are reasonably certain to exercise, or the useful life of the underlying hosted software. We do not expect that adoption of this standard will have a material impact on our results of operations, cash flows or consolidated financial position. Not Yet Adopted as of March 31, 2019 ASU 2016 – 13 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 January 1, 2020. The Company is evaluating the impact the standard will have on its consolidated financial statements and related disclosures. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue | The following table disaggregates our consolidated revenue for the three months ended March 31, 2019 : Three Months Ended March 31, 2019 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Topic 606 revenues Payment processing revenue $ 107,408 $ 59,998 $ 19,392 $ 186,798 Account servicing revenue 6,800 10,585 37,262 54,647 Other revenue 16,986 1,105 6,776 24,867 Total Topic 606 revenues $ 131,194 $ 71,688 $ 63,430 $ 266,312 Non-Topic 606 revenues Account servicing revenue $ 32,439 $ — $ — $ 32,439 Finance fee revenue 45,864 357 152 46,373 Other revenue 23,285 9,603 3,864 36,752 Total non-Topic 606 revenues $ 101,588 $ 9,960 $ 4,016 $ 115,564 Total revenues $ 232,782 $ 81,648 $ 67,446 $ 381,876 The following table disaggregates our consolidated revenue for the three months ended March 31, 2018 : Three Months Ended March 31, 2018 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Topic 606 revenues Payment processing revenue $ 106,978 $ 44,777 $ 16,699 $ 168,454 Account servicing revenue 8,466 9,469 27,025 44,960 Other revenue 17,042 1,117 8,142 26,301 Total Topic 606 revenues $ 132,486 $ 55,363 $ 51,866 $ 239,715 Non-Topic 606 revenues Account servicing revenue $ 33,744 — — $ 33,744 Finance fee revenue 43,604 259 5,018 48,881 Other revenue 20,531 11,157 — 31,688 Total non-Topic 606 revenues $ 97,879 $ 11,416 $ 5,018 $ 114,313 Total revenues $ 230,365 $ 66,779 $ 56,884 $ 354,028 |
Summary of Contract Assets and Liabilities | The following table provides information about these contract balances. (In thousands) Contract balance Location on the unaudited condensed consolidated balance sheets March 31, 2019 December 31, 2018 Receivables 1 Accounts receivable, net $ 41,092 $ 32,949 Contract assets Prepaid expenses and other current assets $ 5,576 $ 3,819 Contract assets Other assets $ 20,280 $ 19,232 Contract liabilities Other current liabilities $ 6,594 $ 7,612 1 The majority of the Company’s receivables, which are 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 Topic 606. |
Schedule of Remaining Performance Obligations | The following table includes revenue expected to be recognized related to remaining performance obligations at the end of the reporting period. (In thousands) Remaining 2019 2020 2021 2022 2023 2024 Total Minimum monthly fees 1 $ 45,776 $ 40,285 $ 23,227 $ 12,313 $ 3,753 $ 639 $ 125,993 Professional services 2 11,655 515 — — — — 12,170 Total remaining performance obligations $ 57,431 $ 40,800 $ 23,227 $ 12,313 $ 3,753 $ 639 $ 138,163 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. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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, based on the estimated fair value at the date of acquisition: (In thousands) Cash consideration, net of cash and restricted cash acquired of $125,865 $ 249,781 Fair value of redeemable non-controlling interest 100,000 Deferred cash consideration 50,000 Total consideration, net of cash and restricted cash acquired $ 399,781 Less: Accounts receivable 10,367 Property and equipment 4,904 Customer relationships (a)(d) 213,600 Developed technologies (b)(d) 38,900 Trademarks and trade names (c)(d) 13,800 Other assets 13,589 Accounts payable (3,024 ) Accrued expenses (7,399 ) Restricted cash payable (125,346 ) Deferred income taxes (22,200 ) Other liabilities (10,015 ) Recorded goodwill $ 272,605 (a) Weighted average life - 7.3 years . (b) Weighted average life - 5.4 years . (c) Weighted average life - 7.3 years . (d) The weighted average life of all amortizable intangible assets acquired in this business combination is 7.0 years . The following is a summary of the preliminary allocation of the purchase price to the assets and liabilities acquired, based on the estimated fair value at the date of acquisition: (In thousands) Total consideration, net of cash and restricted cash acquired of $51,538 $ 291,564 Less: Accounts receivable 23,002 Property and equipment 549 Network relationships (a) (c) 100,900 Developed technologies (b) (c) 15,000 Other assets 2,487 Accounts payable (36,794 ) Deferred income tax liabilities (24,121 ) Other liabilities (2,518 ) Recorded goodwill $ 213,059 (a) Weighted average life - 8.3 years . (b) Weighted average life - 2.9 years . (c) The weighted average life of all amortizable intangible assets acquired in this business combination is 7.6 years . |
Business Acquisition, Pro Forma Information | The following represents unaudited pro forma operational results as if the acquisitions had occurred January 1, 2018: Three Months Ended March 31, 2019 2018 Total revenues $ 400,982 $ 381,826 Net income attributable to shareholders $ 18,810 $ 42,487 Net income attributable to WEX Inc. per share: Basic $ 0.44 $ 0.99 Diluted $ 0.43 $ 0.98 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 December 31, 2018 29 days or less past due 96 % 95 % 59 days or less past due 98 % 98 % |
Changes in Reserves for Credit Losses Related to Accounts Receivable | The following table presents changes in the accounts receivable allowances: Three Months Ended March 31, (In thousands) 2019 2018 Balance, beginning of year $ 46,948 $ 33,387 Provision for credit losses 17,791 14,226 Charges to other accounts 1 4,533 4,442 Charge-offs (24,800 ) (19,221 ) Recoveries of amounts previously charged-off 2,215 1,926 Currency translation 55 99 Balance, end of period $ 46,742 $ 34,859 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) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, (In thousands) 2019 2018 Net income attributable to shareholders $ 16,134 $ 51,970 Weighted average common shares outstanding – Basic 43,220 43,049 Dilutive impact of share-based compensation awards 352 401 Weighted average common shares outstanding – Diluted 43,572 43,450 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The following table presents the notional amounts, fixed interest rates and maturities of the interest rate swap agreements entered into during the three months ended March 31, 2019 : Tranche A Tranche B Tranche C Notional amount at inception (in thousands) $150,000 $100,000 $200,000 Maturity date 3/12/2022 3/12/2022 3/12/2023 Fixed interest rate 2.41750% 2.42500% 2.41325% |
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 March 31, Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income Statement 2019 2018 Interest rate swap agreements – unrealized portion Net unrealized (loss) gain on financial instruments $ (12,209 ) $ 13,508 Interest rate swap agreements – realized portion Financing interest income $ 2,116 $ 313 |
Deposits (Tables)
Deposits (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Banking and Thrift [Abstract] | |
Schedule of Deposits | The following table presents the composition of deposits: (In thousands) March 31, 2019 December 31, 2018 Interest-bearing brokered money market deposits $ 238,940 $ 283,790 Customer deposits 128,402 138,072 Certificates of deposit with maturities within 1 year (a) 467,996 505,582 Short-term deposits 835,338 927,444 Certificates of deposit with maturities greater than 1 year and less than 5 years (a) 300,349 345,231 Total deposits $ 1,135,687 $ 1,272,675 Weighted average cost of funds on certificates of deposit outstanding 2.40 % 2.36 % Weighted average cost of interest-bearing brokered money market deposits 2.55 % 2.49 % (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) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following table summarizes the Company’s total outstanding debt: (In thousands) March 31, 2019 December 31, 2018 Revolving line-of-credit facility under 2016 Credit Agreement (a) $ 169,206 $ — Term loans under 2016 Credit Agreement (a) 2,279,213 1,745,084 Notes outstanding (a) 400,000 400,000 Securitized debt 105,932 106,872 Participation debt 55,677 114,849 Borrowed federal funds 591 — WEX Latin America debt 17,052 16,242 Total gross debt $ 3,027,671 $ 2,383,047 Current portion of gross debt $ 192,736 $ 223,241 Less: Unamortized debt issuance costs (8,379 ) (6,724 ) Short-term debt, net $ 184,357 $ 216,517 Long-term gross debt $ 2,834,935 $ 2,159,806 Less: Unamortized debt issuance costs (25,574 ) (25,883 ) Long-term debt, net $ 2,809,361 $ 2,133,923 Supplemental information under 2016 Credit Agreement: Letters of credit (b) $ 53,534 $ 53,514 Borrowing capacity on revolving credit facility (c) $ 547,260 $ 666,486 (a) See Note 11, Fair Value, for more information regarding the Company’s 2016 Credit Agreement and Notes. (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 |
Schedule of Amounts Outstanding Under Participation Debt Agreements in Place | The following table provides the amounts outstanding under the participation debt agreements in place: March 31, 2019 December 31, 2018 (In thousands) Amounts Outstanding Remaining Funding Capacity Amounts Outstanding Remaining Funding Capacity Short-term debt, net (a) $ 5,677 $ 124,323 $ 64,849 $ 65,151 Long-term debt, net (b) $ 50,000 $ — $ 50,000 $ — Average interest rate 4.85 % 4.30 % (a) Amounts outstanding under agreements terminating on June 30, 2019 and on demand. (b) Amounts outstanding under an agreement terminating on August 31, 2020. |
Fair Value Fair Value (Tables)
Fair Value Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value | The following table presents the Company’s financial instruments that are measured at fair value: (In thousands) Fair Value Hierarchy March 31, 2019 December 31, 2018 Financial Assets: Money market funds (a) 1 $ 5,991 $ 71,228 Investment securities Municipal bonds 2 $ 334 $ 404 Asset-backed securities 2 271 279 Mortgage-backed securities 2 268 260 Fixed-income mutual fund 1 23,899 23,463 Total investment securities $ 24,772 $ 24,406 Executive deferred compensation plan trust (b) 1 $ 7,585 $ 6,398 Interest rate swaps (c) 2 $ 10,805 $ 17,994 Liabilities Interest rate swaps (d) 2 $ 5,020 $ — (a) The fair value is recorded in cash and cash equivalents. (b) The fair value is recorded in prepaid expenses and other current assets and other assets based on the timing of payment obligations. (c) The fair value 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 is recorded in other current liabilities or other liabilities depending on the timing of expected discounted cash flows. |
Redeemable Non-Controlling In_2
Redeemable Non-Controlling Interest (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | The following table presents the changes in the Company’s redeemable non-controlling interest: (In thousands) Three months ended March 31, 2019 Balance, beginning of period $ — Acquisition of Discovery Benefits at fair value 25,757 Establishing redeemable non-controlling interest for WEX Health at carrying value 32,843 Adjustment to redeemable non-controlling interest to reflect WEX Health at fair value 41,400 Net loss attributable to redeemable non-controlling interest (7 ) Balance, end of period $ 99,993 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information Related to Leases | The following table presents supplemental balance sheet information related to our leases: (In thousands) Balance Sheet Location March 31, 2019 Assets Operating lease ROU assets Other assets $ 80,806 Liabilities Current operating lease liabilities Other current liabilities 12,135 Non-current operating lease liabilities Other liabilities 80,320 Total lease liabilities $ 92,455 |
Schedule of Lease Term and Discount Rate | The following table presents supplemental cash flow and other information related to our leases: (In thousands) March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,075 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 14,646 The following table presents the weighted average remaining lease term and discount rate: Operating leases March 31, 2019 Weighted average remaining term (in years) 8.7 Weighted average discount rate 4.6 % |
Schedule of Maturities of Lease Liabilities | The following table presents the maturities of our lease liabilities: (In thousands) March 31, 2019 Remaining 2019 $ 12,070 2020 15,275 2021 14,810 2022 13,420 2023 11,238 2024 and thereafter 47,688 Total lease payments $ 114,501 Less: Imputed interest 22,046 Total lease obligations $ 92,455 Less: Current portion of lease obligations 12,135 Long-term lease obligations $ 80,320 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Assumptions Used | The table below presents the weighted average fair value of service-based stock options by year of grant and the assumptions used in estimating those fair values: 2019 2018 Weighted average fair value $ 58.28 $ 51.27 Weighted average expected life (in years) 6.0 6.0 Weighted average exercise price $ 184.81 $ 158.23 Expected stock price volatility 27.21 % 27.35 % Risk-free interest rate 2.37 % 2.69 % |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Results | The following tables present the Company’s reportable segment revenues: Three Months Ended March 31, 2019 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Revenues Payment processing revenue $ 107,408 $ 59,998 $ 19,392 $ 186,798 Account servicing revenue 39,239 10,585 37,262 87,086 Finance fee revenue 45,864 357 152 46,373 Other revenue 40,271 10,708 10,640 61,619 Total revenues $ 232,782 $ 81,648 $ 67,446 $ 381,876 Interest income $ 2,221 $ 377 $ 159 $ 2,757 Three Months Ended March 31, 2018 (In thousands) Fleet Solutions Travel and Corporate Solutions Health and Employee Benefit Solutions Total Revenues Payment processing revenue $ 106,978 $ 44,777 $ 16,699 $ 168,454 Account servicing revenue 42,210 9,469 27,025 78,704 Finance fee revenue 43,604 259 5,018 48,881 Other revenue 37,573 12,274 8,142 57,989 Total revenues $ 230,365 $ 66,779 $ 56,884 $ 354,028 Interest income $ 995 $ 421 $ 5,967 $ 7,383 |
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 March 31, (In thousands) 2019 2018 Segment adjusted operating income Fleet Solutions $ 92,975 $ 107,973 Travel and Corporate Solutions 34,387 25,249 Health and Employee Benefit Solutions 19,780 18,071 Total segment adjusted operating income $ 147,142 $ 151,293 Reconciliation: Total segment adjusted operating income $ 147,142 $ 151,293 Less: Unallocated corporate expenses 16,942 13,920 Acquisition-related intangible amortization 33,888 35,236 Other acquisition and divestiture related items 9,780 637 Debt restructuring costs 4,400 3,015 Stock-based compensation 10,442 8,955 Restructuring and other costs 2,755 5,671 Operating income 68,935 83,859 Financing interest expense (31,112 ) (27,337 ) Net foreign currency (loss) gain (3,885 ) 390 Net unrealized (loss) gain on financial instruments (11,912 ) 13,508 Income before income taxes $ 22,026 $ 70,420 |
Supplementary Regulatory Capi_2
Supplementary Regulatory Capital Disclosure (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The following table presents WEX Bank’s actual and regulatory minimum capital amounts and ratios: (In thousands) Actual Amount Ratio Minimum for Capital Adequacy Purposes Amount Ratio Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio March 31, 2019 Total Capital to risk-weighted assets $ 317,780 12.01 % $ 211,640 8.0 % $ 264,550 10.0 % Tier 1 Capital to average assets $ 302,413 10.92 % $ 110,746 4.0 % $ 138,432 5.0 % Common equity to risk-weighted assets $ 302,413 11.43 % $ 119,048 4.5 % $ 171,958 6.5 % Tier 1 Capital to risk-weighted assets $ 302,413 11.43 % $ 158,730 6.0 % $ 211,640 8.0 % December 31, 2018 Total Capital to risk-weighted assets $ 323,178 12.82 % $ 201,749 8.0 % $ 252,186 10.0 % Tier 1 Capital to average assets $ 305,734 10.88 % $ 112,401 4.0 % $ 140,501 5.0 % Common equity to risk-weighted assets $ 305,734 12.12 % $ 113,484 4.5 % $ 163,921 6.5 % Tier 1 Capital to risk-weighted assets $ 305,734 12.12 % $ 151,312 6.0 % $ 201,749 8.0 % |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | $ 381,876 | $ 354,028 | ||
Provision for credit losses | 17,791 | 14,226 | ||
Operating income | 68,935 | 83,859 | ||
Income taxes | 5,818 | 17,749 | ||
Net income | $ 16,208 | 52,671 | ||
Net income attributable to shareholders | $ 51,970 | |||
Net income attributable to WEX Inc. per share: | ||||
Basic (in dollars per share) | $ 0.37 | $ 1.21 | ||
Diluted (in dollars per share) | $ 0.37 | $ 1.20 | ||
Net cash provided by operating activities | $ 70,110 | $ 87,806 | ||
Effect of exchange rates on cash, cash equivalents and restricted cash | (587) | |||
Cash, cash equivalents and restricted cash, beginning of period | 526,078 | 399,885 | $ 555,031 | $ 522,385 |
Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 354,829 | |||
Provision for credit losses | 13,990 | |||
Operating income | 78,362 | |||
Income taxes | 15,589 | |||
Net income | 49,334 | |||
Net income attributable to shareholders | $ 48,633 | |||
Net income attributable to WEX Inc. per share: | ||||
Basic (in dollars per share) | $ 1.13 | |||
Diluted (in dollars per share) | $ 1.12 | |||
Net cash provided by operating activities | $ 85,243 | |||
Effect of exchange rates on cash, cash equivalents and restricted cash | (2,577) | |||
Cash, cash equivalents and restricted cash, beginning of period | 526,938 | |||
Brazil Adjustments | Restatement Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | (801) | |||
Provision for credit losses | 236 | |||
Operating income | 5,497 | |||
Income taxes | 2,343 | |||
Net income | 3,154 | |||
Net income attributable to shareholders | $ 3,154 | |||
Net income attributable to WEX Inc. per share: | ||||
Basic (in dollars per share) | $ 0.08 | |||
Diluted (in dollars per share) | $ 0.08 | |||
Net cash provided by operating activities | $ 0 | |||
Effect of exchange rates on cash, cash equivalents and restricted cash | 0 | |||
Cash, cash equivalents and restricted cash, beginning of period | 0 | |||
Other Immaterial Adjustments | Restatement Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total revenues | 0 | |||
Provision for credit losses | 0 | |||
Operating income | 0 | |||
Income taxes | (183) | |||
Net income | 183 | |||
Net income attributable to shareholders | $ 183 | |||
Net income attributable to WEX Inc. per share: | ||||
Basic (in dollars per share) | $ 0 | |||
Diluted (in dollars per share) | $ 0 | |||
Net cash provided by operating activities | $ 2,563 | |||
Effect of exchange rates on cash, cash equivalents and restricted cash | 1,990 | |||
Cash, cash equivalents and restricted cash, beginning of period | $ (4,553) | |||
Payment processing revenue | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Processing costs | $ 91,119 | 73,106 | ||
Payment processing revenue | Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Processing costs | 79,640 | |||
Payment processing revenue | Brazil Adjustments | Restatement Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Processing costs | (6,534) | |||
Payment processing revenue | Other Immaterial Adjustments | Restatement Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Processing costs | $ 0 |
Revenue - Summary of Disaggrega
Revenue - Summary of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | $ 266,312 | $ 239,715 |
Total revenues | 381,876 | 354,028 |
Fleet Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 131,194 | 132,486 |
Total revenues | 232,782 | 230,365 |
Travel and corporate solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 71,688 | 55,363 |
Total revenues | 81,648 | 66,779 |
Health and Employee Benefit Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 63,430 | 51,866 |
Total revenues | 67,446 | 56,884 |
Payment processing revenue | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 186,798 | 168,454 |
Payment processing revenue | Fleet Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 107,408 | 106,978 |
Payment processing revenue | Travel and corporate solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 59,998 | 44,777 |
Payment processing revenue | Health and Employee Benefit Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 19,392 | 16,699 |
Account servicing revenue | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 54,647 | 44,960 |
Total revenues | 32,439 | 33,744 |
Account servicing revenue | Fleet Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 6,800 | 8,466 |
Total revenues | 32,439 | 33,744 |
Account servicing revenue | Travel and corporate solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 10,585 | 9,469 |
Total revenues | 0 | 0 |
Account servicing revenue | Health and Employee Benefit Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 37,262 | 27,025 |
Total revenues | 0 | 0 |
Finance fee revenue | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 46,373 | 48,881 |
Finance fee revenue | Fleet Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 45,864 | 43,604 |
Finance fee revenue | Travel and corporate solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 357 | 259 |
Finance fee revenue | Health and Employee Benefit Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 152 | 5,018 |
Other revenue | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 24,867 | 26,301 |
Total revenues | 36,752 | 31,688 |
Other revenue | Fleet Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 16,986 | 17,042 |
Total revenues | 23,285 | 20,531 |
Other revenue | Travel and corporate solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 1,105 | 1,117 |
Total revenues | 9,603 | 11,157 |
Other revenue | Health and Employee Benefit Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Topic 606 revenues | 6,776 | 8,142 |
Total revenues | 3,864 | 0 |
Total non-Topic 606 revenues | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 115,564 | 114,313 |
Total non-Topic 606 revenues | Fleet Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 101,588 | 97,879 |
Total non-Topic 606 revenues | Travel and corporate solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 9,960 | 11,416 |
Total non-Topic 606 revenues | Health and Employee Benefit Solutions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | $ 4,016 | $ 5,018 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Variable consideration | $ 198.7 | $ 198.5 |
Waived fees | 4.5 | $ 4.4 |
Revenue recognized related to contract liabilities | $ 2.8 |
Revenue - Contract Assets and L
Revenue - Contract Assets and Liabilities From Contracts with Customers (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract assets | $ 5,576 | $ 3,819 |
Short-term deposits | 835,338 | 927,444 |
Accounts receivable, net | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract assets | 41,092 | 32,949 |
Other assets | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract assets | 20,280 | 19,232 |
Other current liabilities | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Short-term deposits | $ 6,594 | $ 7,612 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligation (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 57,431 |
Performance obligations expected to be satisfied, expected timing | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | Monthly Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 45,776 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | Professional Services | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 11,655 |
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 | $ 40,800 |
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 | $ 40,285 |
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 | 515 |
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 | $ 23,227 |
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 | $ 23,227 |
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 | $ 12,313 |
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 | $ 12,313 |
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 | $ 3,753 |
Performance obligations expected to be satisfied, expected timing | 1 year |
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 | $ 3,753 |
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]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 639 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Monthly Fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 639 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | 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 | $ 138,163 |
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 | $ 125,993 |
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 | $ 12,170 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands, € in Millions | Mar. 05, 2019USD ($) | Feb. 14, 2019USD ($) | Jan. 24, 2019USD ($) | Mar. 31, 2019USD ($) | Oct. 31, 2018USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019EUR (€) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | ||||||||||
Payment for trade accounts receivable portfolio | $ 223,400 | |||||||||
Premium in excess of receivables' estimated fair value | 162,800 | |||||||||
Payment in escrow for carrying value of accounts receivable | $ 38,900 | |||||||||
Goodwill | $ 2,331,110 | $ 2,331,110 | $ 2,331,110 | $ 1,832,129 | ||||||
Discovery Benefits | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 525,600 | |||||||||
Deferred cash consideration | 50,000 | 50,000 | ||||||||
Fair value of equity interests acquired | $ 100,000 | |||||||||
Revenue from acquiree since acquisition | 8,600 | |||||||||
Net loss from acquiree since acquisition | (1,100) | |||||||||
Goodwill | 272,605 | 272,605 | 272,605 | |||||||
Accounts receivable acquired | 10,367 | 10,367 | 10,367 | |||||||
Pavestone Capital | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 28,100 | |||||||||
Goodwill | 12,800 | |||||||||
Accounts receivable acquired | $ 14,600 | |||||||||
Noventis | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 343,100 | |||||||||
Deferred cash consideration | 15,594 | |||||||||
Amount of accelerated vesting of options | 5,600 | |||||||||
Revenue from acquiree since acquisition | 9,200 | |||||||||
Net loss from acquiree since acquisition | 1,800 | |||||||||
Goodwill | 213,059 | 213,059 | 213,059 | |||||||
Accounts receivable acquired | $ 23,002 | $ 23,002 | $ 23,002 | |||||||
Scenario, Forecast | Go Fuel Card | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 265,500 | € 235 | ||||||||
Discovery Benefits | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Ownership percentage by noncontrolling interest | 4.90% |
Acquisitions - Schedules of Ass
Acquisitions - Schedules of Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands | Mar. 05, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Feb. 14, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||
Cash consideration, net of cash and restricted cash acquired of $125,865 | $ 568,426 | $ 0 | |||
Less: | |||||
Recorded goodwill | $ 2,331,110 | $ 1,832,129 | |||
Weighted average life (in years) | 7 years | ||||
Discovery Benefits | |||||
Business Acquisition [Line Items] | |||||
Cash consideration, net of cash and restricted cash acquired of $125,865 | $ 249,781 | ||||
Fair value of redeemable non-controlling interest | 100,000 | ||||
Deferred cash consideration | $ 50,000 | 50,000 | |||
Restricted cash | 125,865 | ||||
Less: | |||||
Accounts receivable | 10,367 | ||||
Other assets | 13,589 | ||||
Accrued expenses | (7,399) | ||||
Restricted cash payable | (125,346) | ||||
Deferred income taxes | (22,200) | ||||
Other liabilities | (10,015) | ||||
Accounts payable | (3,024) | ||||
Recorded goodwill | 272,605 | ||||
Pavestone Capital | |||||
Less: | |||||
Accounts receivable | $ 14,600 | ||||
Recorded goodwill | $ 12,800 | ||||
Noventis | |||||
Business Acquisition [Line Items] | |||||
Cash consideration, net of cash and restricted cash acquired of $125,865 | 275,970 | ||||
Deferred cash consideration | 15,594 | ||||
Total consideration | 291,564 | ||||
Less: | |||||
Accounts receivable | 23,002 | ||||
Property and equipment | 549 | ||||
Deferred income taxes | (24,121) | ||||
Other liabilities | (2,518) | ||||
Other assets | 2,487 | ||||
Accounts payable | (36,794) | ||||
Recorded goodwill | $ 213,059 | ||||
Weighted average life (in years) | 7 years 7 months 6 days | ||||
Customer relationships | |||||
Less: | |||||
Weighted average life (in years) | 7 years 3 months 18 days | ||||
Customer relationships | Discovery Benefits | |||||
Business Acquisition [Line Items] | |||||
Total consideration | $ 399,781 | ||||
Less: | |||||
Property and equipment | 4,904 | ||||
Intangible assets | 213,600 | ||||
Customer relationships | Noventis | |||||
Less: | |||||
Intangible assets | $ 100,900 | ||||
Weighted average life (in years) | 8 years 3 months 18 days | ||||
Developed technologies | |||||
Less: | |||||
Weighted average life (in years) | 5 years 4 months 24 days | ||||
Developed technologies | Discovery Benefits | |||||
Less: | |||||
Intangible assets | $ 38,900 | ||||
Developed technologies | Noventis | |||||
Less: | |||||
Intangible assets | $ 15,000 | ||||
Weighted average life (in years) | 2 years 10 months 24 days | ||||
Trademarks and trade names | |||||
Less: | |||||
Weighted average life (in years) | 7 years 3 months 18 days | ||||
Trademarks and trade names | Discovery Benefits | |||||
Less: | |||||
Intangible assets | $ 13,800 |
Acquisitions - Schedule of Pro
Acquisitions - Schedule of Pro Forma Information (Details) - Discovery Benefits and Noventis - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Total revenues | $ 400,982 | $ 381,826 |
Net income attributable to shareholders | $ 18,810 | $ 42,487 |
Net income attributable to WEX Inc. per share: | ||
Basic (in dollars per share) | $ 0.44 | $ 0.99 |
Diluted (in dollars per share) | $ 0.43 | $ 0.98 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
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 | $ 43 | $ 18.9 |
29 days or less past due | Credit Concentration Risk | Accounts receivable, net | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 96.00% | 95.00% |
59 days or less past due | Credit Concentration Risk | Accounts receivable, net | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 98.00% | 98.00% |
Accounts Receivable - Changes i
Accounts Receivable - Changes in Reserves for Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance, beginning of year | $ 46,948 | $ 33,387 |
Provision for credit losses | 17,791 | 14,226 |
Charges to other accounts | 4,533 | 4,442 |
Charge-offs | (24,800) | (19,221) |
Recoveries of amounts previously charged-off | 2,215 | 1,926 |
Currency translation | 55 | 99 |
Balance, end of period | $ 46,742 | $ 34,859 |
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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net income attributable to shareholders | $ 16,134 | $ 51,970 |
Weighted average common shares outstanding – Basic (in shares) | 43,220 | 43,049 |
Dilutive impact of share-based compensation awards (in shares) | 352 | 401 |
Weighted average common shares outstanding – Diluted (in shares) | 43,572 | 43,450 |
Earnings per Share - Stock Opti
Earnings per Share - Stock Options and Restricted Stock Units (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) $ in Billions | Mar. 31, 2019USD ($) | Mar. 12, 2019contract | Dec. 31, 2018USD ($)contract |
Interest rate swaps | |||
Derivative [Line Items] | |||
Number of interest rate swap contracts entered into | contract | 3 | 4 | |
Borrowings under derivative agreements | $ 1.5 | $ 1 | |
Interest rate swaps | Minimum | |||
Derivative [Line Items] | |||
Fixed rate variable interest | 1.108% | ||
Interest rate swaps | Maximum | |||
Derivative [Line Items] | |||
Fixed rate variable interest | 2.212% | ||
2016 Credit Agreement | |||
Derivative [Line Items] | |||
Lines of credit outstanding | $ 2.4 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Interest Rate Swaps (Details) - Derivatives Not Designated as Hedging Instruments | Mar. 31, 2019USD ($) |
Tranche A | |
Derivative [Line Items] | |
Notional amount at inception (in thousands) | $ 150,000,000 |
Fixed interest rate | 2.4175% |
Tranche B | |
Derivative [Line Items] | |
Notional amount at inception (in thousands) | $ 100,000,000 |
Fixed interest rate | 2.425% |
Tranche C | |
Derivative [Line Items] | |
Notional amount at inception (in thousands) | $ 200,000,000 |
Fixed interest rate | 2.41325% |
Derivative Instruments - Locati
Derivative Instruments - Location and Amounts of Interest Rate Swap Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net unrealized gains on financial instruments | $ (11,912) | $ 13,508 |
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 gains on financial instruments | (12,209) | 13,508 |
Derivatives Not Designated as Hedging Instruments | Financing interest income | Interest rate swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net unrealized gains on financial instruments | $ 2,116 | $ 313 |
Deposits - Narrative (Details)
Deposits - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Required reserve based on the outstanding customer deposits | $ 11,200,000 | $ 11,100,000 |
Maximum money market and demand deposit accounts purchasable | 125,000,000 | |
Outstanding balance of ICS purchases | $ 0 | $ 0 |
Minimum | ||
Debt Instrument [Line Items] | ||
Certificate of deposits maturities period | 1 year | |
Certificate of deposits, fixed interest rates range (as a percent) | 1.30% | |
Maximum | ||
Debt Instrument [Line Items] | ||
Certificate of deposits maturities period | 5 years | |
Certificate of deposits, fixed interest rates range (as a percent) | 3.52% |
Financing and Other Debt - Sche
Financing and Other Debt - Schedule of Debt (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 3,027,671,000 | $ 2,383,047,000 |
Current portion of gross debt | 192,736,000 | 223,241,000 |
Less: Unamortized debt issuance costs | (8,379,000) | (6,724,000) |
Short-term debt, net | 184,357,000 | 216,517,000 |
Long-term gross debt | 2,834,935,000 | 2,159,806,000 |
Less: Unamortized debt issuance costs | (25,574,000) | (25,883,000) |
Long-term debt, net | 2,809,361,000 | $ 2,133,923,000 |
2016 Credit Agreement | ||
Supplemental information under 2016 Credit Agreement: | ||
Letters of credit | $ 2,400,000,000 | |
Weighted average annual interest rate, percent | 4.60% | 4.70% |
Loan Participations and Assignments | ||
Debt Instrument [Line Items] | ||
Funding capacity of participation debt | $ 124,323,000 | $ 65,151,000 |
Long-term debt, gross | $ 55,677,000 | $ 114,849,000 |
Supplemental information under 2016 Credit Agreement: | ||
Weighted average annual interest rate, percent | 4.85% | 4.30% |
Revolving line-of-credit facility under 2016 Credit Agreement | 2016 Credit Agreement | ||
Supplemental information under 2016 Credit Agreement: | ||
Maximum borrowing capacity | $ 547,260,357.349 | $ 666,486,000 |
Secured debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 105,932,000 | 106,872,000 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 591,000 | 0 |
Line of Credit | Revolving line-of-credit facility under 2016 Credit Agreement | 2016 Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 169,206,000 | 0 |
Line of Credit | Secured debt | 2016 Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 2,279,213,000 | 1,745,084,000 |
Notes payable | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 400,000,000 | 400,000,000 |
Letter of Credit | Revolving line-of-credit facility under 2016 Credit Agreement | 2016 Credit Agreement | ||
Supplemental information under 2016 Credit Agreement: | ||
Letters of credit | 53,534,000 | 53,514,000 |
Long-term Debt | Loan Participations and Assignments | ||
Debt Instrument [Line Items] | ||
Debt balance | 50,000,000 | 50,000,000 |
Short-term Debt | Loan Participations and Assignments | ||
Debt Instrument [Line Items] | ||
Debt balance | $ 5,677,000 | $ 64,849,000 |
Deposits - Schedule of Composi
Deposits - Schedule of Composition of Deposits (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Banking and Thrift [Abstract] | ||
Interest-bearing brokered money market deposits | $ 238,940 | $ 283,790 |
Customer deposits | 128,402 | 138,072 |
Certificates of deposit with maturities within 1 year | 467,996 | 505,582 |
Short-term deposits | 835,338 | 927,444 |
Certificates of deposit with maturities greater than 1 year and less than 5 years | 300,349 | 345,231 |
Total deposits | $ 1,135,687 | $ 1,272,675 |
Weighted average cost of funds on certificates of deposit outstanding (as a percent) | 2.40% | 2.36% |
Weighted average cost of interest-bearing money market deposits (as a percent) | 2.55% | 2.49% |
Financing and Other Debt - Addi
Financing and Other Debt - Additional Information (Details) - USD ($) | Apr. 07, 2016 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 05, 2019 | Jan. 18, 2019 |
Debt Instrument [Line Items] | |||||
General and administrative costs incurred | $ 4,400,000 | ||||
Debt issuance costs | $ 3,400,000 | ||||
Long-term debt | $ 3,027,671,000 | $ 2,383,047,000 | |||
Interest rate during period, percent | 2.64% | ||||
2016 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Weighted average annual interest rate, percent | 4.60% | 4.70% | |||
Delayed Draw Commitment | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | 275,000,000 | ||||
Australian Securitization Facility | |||||
Debt Instrument [Line Items] | |||||
Percentage used as collateral | 85.00% | ||||
Interest rate during period, percent | 2.90% | 2.89% | |||
Short-term debt, net | $ 78,700,000 | $ 87,000,000 | |||
European Securitization Facility | |||||
Debt Instrument [Line Items] | |||||
Interest rate during period, percent | 0.87% | 0.98% | |||
Debt instrument, term | 5 years | ||||
Securitized debt | $ 26,400,000 | $ 18,000,000 | |||
Loan Participations and Assignments | |||||
Debt Instrument [Line Items] | |||||
Weighted average annual interest rate, percent | 4.85% | 4.30% | |||
Long-term debt | $ 55,677,000 | $ 114,849,000 | |||
Funding capacity of participation debt | $ 124,323,000 | 65,151,000 | |||
Loan Participations and Assignments | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Margin on variable rate, percent | 2.25% | ||||
Credit Facility Term Loans | 2016 Credit Agreement Tranche A | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | 480,000,000 | $ 250,000,000 | 723,700,000 | ||
Incremental revolving commitments | 300,000,000 | ||||
Mandatory quarterly payments | $ 12,500,000 | ||||
Credit Facility Term Loans | Revolving line-of-credit facility under 2016 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | $ 50,000,000 | ||||
Credit Facility Term Loans | 2016 Credit Agreement Tranche B | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | 1,335,000,000 | ||||
Mandatory quarterly payments | $ 3,400,000 | ||||
Credit Facility Term Loans | 2016 Credit Agreement Tranche B | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Margin on variable rate, percent | 2.25% | ||||
Credit Facility Term Loans | 2016 Credit Agreement Tranche B | Eurocurrency Rate | |||||
Debt Instrument [Line Items] | |||||
Margin on variable rate, percent | 1.25% | ||||
Revolving line-of-credit facility under 2016 Credit Agreement | 2016 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | 720,000,000 | ||||
Incremental revolving commitments | $ 25,000,000 | ||||
Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 591,000 | 0 | |||
WEX Latin America | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 17,052,000 | $ 16,242,000 | |||
Interest rate during period, percent | 24.74% | 23.59% | |||
Short-term debt | $ 17,100,000 | $ 16,200,000 | |||
Letter of Credit | Revolving line-of-credit facility under 2016 Credit Agreement | 2016 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | 250,000,000 | ||||
Swingline Loan | Revolving line-of-credit facility under 2016 Credit Agreement | 2016 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | 20,000,000 | ||||
Senior Notes | Notes payable | |||||
Debt Instrument [Line Items] | |||||
Senior notes | 400,000,000 | 400,000,000 | |||
Long-term debt | $ 400,000,000 | $ 400,000,000 | |||
Interest rate, stated percentage | 4.75% | 4.75% | |||
Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 327,409,466 | $ 309,000,000 | |||
Short-term Debt | Loan Participations and Assignments | |||||
Debt Instrument [Line Items] | |||||
Debt balance | 5,677,000 | 64,849,000 | |||
Long-term Debt | Loan Participations and Assignments | |||||
Debt Instrument [Line Items] | |||||
Debt balance | $ 50,000,000 | $ 50,000,000 |
Off-Balance Sheet Arrangements
Off-Balance Sheet Arrangements (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Proceeds from sale of factoring receivables | $ 2,000,000,000 | ||
Loss on sale of factoring receivables | 600,000 | ||
Operating interest | 2,757,000 | $ 7,383,000 | |
WEX Europe Services | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Proceeds from sale of factoring receivables | 150,000,000 | 170,200,000 | |
Loss on sale of factoring receivables | 800,000 | $ 1,100,000 | |
WEX Latin America | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loss on sale of factoring receivables | (3,700,000) | ||
WEX Latin America Securitization Facility | WEX Latin America | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Proceeds from sale of factoring receivables | 20,700,000 | ||
Equity contributions to investment fund | $ 0 | ||
Operating interest | $ 2,100,000 |
Fair Value - Assets and Liabili
Fair Value - Assets and Liabilities Measured at Fair Value and Related Hierarchy Levels (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Financial Assets: | ||
Total investment securities | $ 24,772 | $ 24,406 |
Level 1 | ||
Financial Assets: | ||
Executive deferred compensation plan trust | 7,585 | 6,398 |
Level 2 | Interest rate swaps | ||
Financial Assets: | ||
Derivative asset | 10,805 | 17,994 |
Liabilities | ||
Interest rate swaps | 5,020 | 0 |
Money Market Funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 5,991 | 71,228 |
Municipal bonds | Level 2 | ||
Financial Assets: | ||
Total investment securities | 334 | 404 |
Asset-backed securities | Level 2 | ||
Financial Assets: | ||
Total investment securities | 271 | 279 |
Mortgage-backed securities | Level 2 | ||
Financial Assets: | ||
Total investment securities | 268 | 260 |
Fixed-income mutual fund | Level 1 | ||
Financial Assets: | ||
Total investment securities | $ 23,899 | $ 23,463 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
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 | $ 399 | $ 392 |
Redeemable Non-Controlling In_3
Redeemable Non-Controlling Interest - Narrative (Details) - USD ($) $ in Thousands | Mar. 05, 2019 | Mar. 31, 2019 |
Noncontrolling Interest [Line Items] | ||
Adjustment to redeemable non-controlling interest to reflect WEX Health at fair value | $ 41,400 | |
Additional Paid-in Capital | ||
Noncontrolling Interest [Line Items] | ||
Adjustment to redeemable non-controlling interest to reflect WEX Health at fair value | $ (41,400) | |
Discovery Benefits | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage by noncontrolling interest | 4.90% | |
Discovery Benefits | Additional Paid-in Capital | ||
Noncontrolling Interest [Line Items] | ||
Adjustment to redeemable non-controlling interest to reflect WEX Health at fair value | $ 41,400 | |
Discovery Benefits | Non–Controlling Interest | ||
Noncontrolling Interest [Line Items] | ||
Adjustment to redeemable non-controlling interest to reflect WEX Health at fair value | $ 41,400 | |
Minimum | Discovery Benefits | ||
Noncontrolling Interest [Line Items] | ||
Call rights, exercise period | 5 years | |
Maximum | Discovery Benefits | ||
Noncontrolling Interest [Line Items] | ||
Call rights, exercise period | 7 years |
Redeemable Non-Controlling In_4
Redeemable Non-Controlling Interest - Schedule of Redeemable Non-Controlling Interest (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Balance, beginning of period | $ 0 |
Establishing redeemable non-controlling interest for WEX Health at carrying value | 25,757 |
Establishing redeemable non-controlling interest for WEX Health at carrying value | 32,843 |
Adjustment to redeemable non-controlling interest to reflect WEX Health at fair value | 41,400 |
Net loss attributable to redeemable non-controlling interest | (7) |
Balance, end of period | $ 99,993 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 26.40% | 25.20% | |
Undistributed earnings of certain foreign subsidiaries | $ 77 | $ 64.9 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Assets | |
Operating lease ROU assets | $ 80,806 |
Liabilities | |
Current operating lease liabilities | 12,135 |
Non-current operating lease liabilities | 80,320 |
Total lease liabilities | $ 92,455 |
Leases - Schedule of Lease Term
Leases - Schedule of Lease Term and Discount Rate (Details) | Mar. 31, 2019 |
Leases [Abstract] | |
Weighted-average remaining operating lease term (in years) | 8 years 8 months 12 days |
Weighted-average discount rate (as a percent) | 4.60% |
Leases - Maturities of Lease Pa
Leases - Maturities of Lease Payments (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Remaining 2019 | $ 12,070 |
2020 | 15,275 |
2021 | 14,810 |
2022 | 13,420 |
2023 | 11,238 |
2024 and thereafter | 47,688 |
Total lease payments | 114,501 |
Less: Imputed interest | 22,046 |
Total lease liabilities | 92,455 |
Less: Current portion of lease obligation | 12,135 |
Long-term lease obligations | $ 80,320 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Additional lease not yet commenced, term (in years) | 14 years |
Additional lease not yet commenced | $ 30 |
Operating lease cost | $ 4 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 4,075 |
Right-of-use assets obtained in exchange for lease liabilities: | $ 14,646 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Fair value of units awarded | $ 38.1 | $ 27.4 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Assumptions Used to Calculate Fair Value of Stock Options (Details) - Stock Options - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value (in dollars per share) | $ 58.28 | $ 51.27 |
Weighted average expected life (in years) | 6 years | 6 years |
Weighted average exercise price (in dollars per share) | $ 184.81 | $ 158.23 |
Expected stock price volatility (as a percent) | 27.21% | 27.35% |
Weighted average risk–free rate | 2.37% | 2.69% |
Restructuring Activities - Addi
Restructuring Activities - Additional Information (Details) $ in Millions | Mar. 31, 2019USD ($) |
Restructuring and Related Activities [Abstract] | |
Restructuring charges incurred to date | $ 24.8 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Revenue b
Segment Information - Revenue by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Payment processing revenue | $ 266,312 | $ 239,715 |
Account servicing revenue | 87,086 | 78,704 |
Finance fee revenue | 46,373 | 48,881 |
Other revenue | 61,619 | 57,989 |
Total revenues | 381,876 | 354,028 |
Interest income | 2,757 | 7,383 |
Fleet Solutions | ||
Segment Reporting Information [Line Items] | ||
Payment processing revenue | 131,194 | 132,486 |
Account servicing revenue | 39,239 | 42,210 |
Finance fee revenue | 43,604 | |
Other revenue | 40,271 | 37,573 |
Total revenues | 232,782 | 230,365 |
Interest income | 2,221 | 995 |
Travel and Corporate Solutions | ||
Segment Reporting Information [Line Items] | ||
Payment processing revenue | 71,688 | 55,363 |
Account servicing revenue | 9,469 | |
Finance fee revenue | 259 | |
Other revenue | 10,708 | 12,274 |
Total revenues | 81,648 | 66,779 |
Interest income | 377 | 421 |
Health and Employee Benefit Solutions | ||
Segment Reporting Information [Line Items] | ||
Payment processing revenue | 63,430 | 51,866 |
Account servicing revenue | 27,025 | |
Finance fee revenue | 5,018 | |
Other revenue | 10,640 | 8,142 |
Total revenues | 67,446 | 56,884 |
Interest income | 159 | 5,967 |
Payment processing revenue | ||
Segment Reporting Information [Line Items] | ||
Payment processing revenue | 186,798 | 168,454 |
Payment processing revenue | Fleet Solutions | ||
Segment Reporting Information [Line Items] | ||
Payment processing revenue | 107,408 | 106,978 |
Payment processing revenue | Travel and Corporate Solutions | ||
Segment Reporting Information [Line Items] | ||
Payment processing revenue | 59,998 | 44,777 |
Payment processing revenue | Health and Employee Benefit Solutions | ||
Segment Reporting Information [Line Items] | ||
Payment processing revenue | $ 19,392 | $ 16,699 |
Segment Information - Reconcili
Segment Information - Reconciliation of Adjusted Operating Income to Income Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Adjusted operating income | $ 147,142 | $ 151,293 |
Stock-based compensation | 9,703 | 8,955 |
Operating income | 68,935 | 83,859 |
Financing interest expense | (31,112) | (27,337) |
Net foreign currency (loss) gain | (3,885) | 390 |
Net unrealized gains on financial instruments | (11,912) | 13,508 |
Income before income taxes | 22,026 | 70,420 |
Fleet Solutions | ||
Segment Reporting Information [Line Items] | ||
Adjusted operating income | 92,975 | 107,973 |
Travel and corporate solutions | ||
Segment Reporting Information [Line Items] | ||
Adjusted operating income | 34,387 | 25,249 |
Health and Employee Benefit Solutions | ||
Segment Reporting Information [Line Items] | ||
Adjusted operating income | 19,780 | 18,071 |
Segment reconciling items | ||
Segment Reporting Information [Line Items] | ||
Unallocated corporate expenses | 16,942 | 13,920 |
Acquisition-related intangible amortization | 33,888 | 35,236 |
Other acquisition and divestiture related items | 9,780 | 637 |
Debt restructuring costs | 4,400 | 3,015 |
Stock-based compensation | 10,442 | 8,955 |
Restructuring and other costs | $ 2,755 | $ 5,671 |
Supplementary Regulatory Capi_3
Supplementary Regulatory Capital Disclosure (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Total Capital to risk-weighted assets, Actual Amount | $ 317,780 | $ 323,178 |
Total Capital to risk-weighted assets, Actual, Ratio | 12.01% | 12.82% |
Total Capital to risk-weighted assets, Minimum for Capital Adequacy Purposes Amount | $ 211,640 | $ 201,749 |
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 | $ 264,550 | $ 252,186 |
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 | $ 302,413 | $ 305,734 |
Tier 1 Capital to average assets, Actual, Ratio | 10.92% | 10.88% |
Tier 1 Capital to average assets, Minimum for Capital Adequacy Purposes Amount | $ 110,746 | $ 112,401 |
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 | $ 138,432 | $ 140,501 |
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 | $ 302,413 | $ 305,734 |
Common equity to risk-weighted assets, Actual, Ratio | 11.43% | 12.12% |
Common equity to risk-weighted assets, Minimum for Capital Adequacy Purposes Amount | $ 119,048 | $ 113,484 |
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 | $ 171,958 | $ 163,921 |
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 | $ 302,413 | $ 305,734 |
Tier 1 Capital to risk-weighted assets, Actual, Ratio | 11.43% | 12.12% |
Tier 1 Capital to risk-weighted assets, Minimum for Capital Adequacy Purposes Amount | $ 158,730 | $ 151,312 |
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 | $ 211,640 | $ 201,749 |
Tier 1 capital to risk-weighted assets, Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions Amount, Ratio | 8.00% | 8.00% |
Uncategorized Items - wex-20190
Label | Element | Value | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 1,630,738,000 | |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 638,000 | [1] |
Common Stock [Member] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 473,000 | |
Shares, Issued | us-gaap_SharesIssued | 47,352,000 | |
Retained Earnings [Member] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 1,313,298,000 | |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 638,000 | [1] |
Treasury Stock [Member] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (172,342,000) | |
Additional Paid-in Capital [Member] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 569,319,000 | |
Noncontrolling Interest [Member] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 9,220,000 | |
AOCI Attributable to Parent [Member] | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ (89,230,000) | |
[1] | Includes the impact of the Company’s modified retrospective adoption as part of Topic 606. |