Corpay (CPAY) 10-K risk factor changes: FY2019 vs FY2018

[removed: You] [added: *You] should carefully consider the following risks applicable to us.

See [removed: "Note] [added: “Note] Regarding Forward-Looking [removed: Statements"] [added: Statements”] in this [removed: report.][added: report.*]

[removed: Risks] [added: Risks] related to our [removed: business][added: business]

[removed: A] [added: A] decline in retail fuel prices could adversely affect our revenue and operating [removed: results.][added: results.]

We believe that in [removed: 2018,] [added: 2019,] approximately [removed: 14%] [added: 13%] our consolidated revenue was directly influenced by the absolute price of fuel.

| • | governmental regulations, [added: trade sanctions and embargos,] taxes and tariffs. |

[removed: A] [added: A] portion of our revenue is derived from fuel-price spreads.

As a result, a contraction in fuel-price spreads could adversely affect our operating [removed: results.][added: results.]

Approximately 5% of our consolidated revenue in [removed: 2018] [added: 2019,] was derived from transactions where our revenue is tied to fuel-price spreads.

[removed: If] [added: If] we fail to adequately assess and monitor credit risks of our customers, we could experience an increase in credit [removed: loss.][added: loss.]

For the years ended December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] our bad debt expense was [removed: $64.4] [added: $74.3] million and [removed: $44.9] [added: $64.4] million, or 6 bps and [removed: 7] [added: 6] bps of total billings, respectively.

[removed: Any] [added: Any] decrease in our receipt of [removed: such] [added: program] fees and charges, or limitations on our [added: program] fees and charges, could adversely affect our business, results of operations and financial [removed: condition.][added: condition.]

Revenues for late fees and finance charges represent 6% of our consolidated revenue for the year ended December 31, [removed: 2018.][added: 2019.]

[removed: We] [added: We] operate in a competitive business environment, and if we are unable to compete effectively, our business, operating results and financial condition would be adversely [removed: affected.][added: affected.]

[removed: Our] [added: Our] fleet card business is dependent on several key strategic relationships, the loss of which could adversely affect our operating [removed: results.][added: results.]

During [removed: 2018,] [added: 2019,] our top three strategic relationships with major oil companies accounted for less than [removed: 6%] [added: 4%] of our consolidated revenue.

[removed: If] [added: If] we are unable to maintain and expand [removed: these] [added: our merchant] relationships, our closed loop fleet card and lodging card businesses may be adversely [removed: affected.][added: affected.]

Similarly, our growth also will depend on our ability to retain and maintain existing merchant relationships that accept our proprietary closed-loop networks in areas where our customers purchase [removed: fuel] [added: fuel, maintenance services,] and lodging.

[removed: We depend on] [added: If we are unable to maintain] our relationships with major truck stop [removed: merchants to serve] [added: merchants,] our over-the-road fuel card [removed: customers.][added: businesses may be adversely affected.]

[removed: A] [added: A] decline in general economic conditions, and in particular, a decline in demand for fuel and other business related products and services would adversely affect our business, operating results and financial [removed: condition.][added: condition.]

[removed: If] [added: If] we are unable to successfully integrate [removed: these] new [removed: businesses,] [added: lines of business we have acquired or may acquire in the future,] our results of operations and financial condition may be adversely [removed: affected.][added: affected.]

[removed: If] [added: If] we fail to develop and implement new technology, products and services, adapt our products and services to changes in technology, the marketplace requirements, or if our ongoing efforts to upgrade our technology, products and services are not successful, we could lose customers and [removed: partners.][added: partners.]

[removed: Our] [added: Our] debt obligations, or our incurrence of additional debt obligations, could limit our flexibility in managing our business and could materially and adversely affect our financial [removed: performance.][added: performance.]

At December 31, [removed: 2018,] [added: 2019,] we had approximately [removed: $4.78] [added: $4.99] billion of debt outstanding under our Credit Facility and Securitization Facility.

| • | we may be required to dedicate a substantial portion of our cash flow from operations to required payments on our indebtedness, thereby reducing the availability of cash flow for acquisitions, working capital, capital expenditures and other general corporate activities. See [removed: "Management’s] [added: “Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations—Contractual Obligations,"] [added: Operations-Contractual Obligations,”] which sets forth our payment obligations with respect to our existing long-term debt; |

[removed: We] [added: We] meet a significant portion of our working capital needs through a securitization facility, which we must renew every three [removed: years.][added: years.]

[added: Further, we are] exposed to the risk of increased interest rates because our borrowings under the Securitization Facility are subject to variable rates of interest.

[removed: Changes] [added: Changes] in the method pursuant to which the LIBOR rates are determined and potential phasing out of LIBOR after 2021 may adversely affect our results of [removed: operations.][added: operations.]

Further, if LIBOR ceases to exist, we may be forced to substitute an alternative reference rate, such as [added: SOFR or] a different benchmark interest rate or base rate borrowings, in lieu of LIBOR under our current and future indebtedness and cash flow hedges.

[removed: At this point, it is not clear what, if any, alternative reference rate may be adopted to replace LIBOR, however, any] [added: Any] such alternative reference rate may be calculated differently than LIBOR and may increase the interest expense associated with our existing or future indebtedness.

[removed: We] [added: We] are subject to risks related to volatility in foreign currency exchange rates, and restrictions on our ability to utilize revenue generated in foreign [removed: currencies.][added: currencies.]

For the year ended December 31, [removed: 2018,] [added: 2019,] approximately [removed: 39%] [added: 40%] of our revenue was denominated in currencies other than the U.S. dollar (primarily, British pound, Brazilian real, Canadian dollar, Russian ruble, Mexican peso, Czech koruna, Euro, Australian dollar and New Zealand dollar).

[removed: We expect to continue our] [added: Our] expansion through [removed: acquisitions, which] [added: acquisitions] may divert our management’s attention and result in unexpected operating difficulties, increased costs and dilution to our [removed: stockholders.][added: stockholders, and we may never realize the anticipated benefits.]

[removed: We conduct a significant portion of our] [added: Our] business in foreign countries [removed: and we expect to expand our operations into additional foreign countries where we] may be adversely affected by operational and political risks that are greater than in the [removed: U.S.][added: U.S.]

We have foreign operations in, or provide services for commercial card accounts in [removed: 82] [added: more than 100] countries throughout North America, South America, Europe, Africa, Oceania and Asia.

Some of the countries where we operate, and other countries where we will seek to operate, such as Russia, Brazil and Mexico, have undergone significant political, economic and social change in recent years, and the risk of unforeseen changes in these countries may be greater than in the U.S. For example, Russia and Ukraine are experiencing significant unrest, which could escalate into broader armed conflict and additional economic sanctions by the [removed: U.S.,] [added: U.S, the] United Nations or other countries against Russia.

[removed: We] [added: We] are dependent on the efficient and uninterrupted operation of interconnected computer systems, telecommunications, data centers and call centers, including technology and network systems managed by multiple third parties, which could result in our inability to prevent disruptions in our [removed: services.][added: services.]

[removed: We] [added: We] may experience software defects, system errors, computer viruses and development delays, which could damage customer relationships, decrease our profitability and expose us to [removed: liability.][added: liability.]

A system outage could adversely affect our business, financial condition or results of operations, including by damaging our reputation or exposing us [removed: to third-party liability.]

[removed: We] [added: We] may incur substantial losses due to fraudulent use of our payment cards or [removed: vouchers.][added: vouchers.]

Accordingly, there is considerable uncertainty regarding the publication of LIBOR beyond 2021.

The Federal Reserve Board convened the Alternative Reference Rates Committee (“ARRC”) to identify a set of alternative reference rates for possible use as market benchmarks.

Based on the ARRC’s recommendation, the Federal Reserve Bank of New York began publishing the Secured Overnight Financing Rate (“SOFR”) and two other alternative rates beginning in April 2018.

Since then, certain derivative products and debt securities tied to SOFR have been introduced, and a number of industry groups are developing transition plans to SOFR as the new market benchmark.

We are not able to predict whether LIBOR will actually cease to be available after 2021 or whether SOFR will become the market benchmark in its place.

Following a referendum in June 2016, in which voters in the U.K. approved an exit (often referred to as Brexit) from the European Union, the U.K.’s withdrawal became effective on January 31, 2020.

A transition period will apply until the end of 2020 (or later, if extended) during which the pre-Brexit legal regime will continue to apply (including with respect to aviation) while the U.K. and European Union negotiate rules that will apply to their future relationship.

It is unknown how that future relationship will be structured, and it is uncertain what will be the terms of the future relationship between the U.K. and the European Union on matters such as trade, customs, financial services and the movement of goods and people.

to third-party liability.

Threats to our systems and our associated third parties’ systems can derive from human error,

A decline in the acceptance and use of credit, debit and/or stored value cards, and electronic

Legislation and regulation of greenhouse gases (“GHG”) and related divestment and other efforts could adversely affect our business.

We are aware of the increasing focus of local, state, regional, national and international regulatory bodies on GHG emissions and climate change issues.

Legislation to regulate GHG emissions has periodically been introduced in the U.S. Congress, and there has been a wide-ranging policy debate, both in the U.S. and internationally, regarding the impact of these gases and possible means for their regulation.

Several states and geographic regions in the U.S. have adopted legislation and regulations to reduce emissions of GHGs.

Additional legislation or regulation by these states and regions, the EPA, and/or any international agreements to which the U.S. may become a party, that control or limit GHG emissions or otherwise seek to address climate change could adversely affect our partners’ and merchants’ operations, and therefore ours.

See “*Our fleet card business is dependent on several key strategic relationships, the loss of which could adversely affect our operating results.*” and “*If we are unable to maintain and expand our merchant relationships, our closed loop fleet card and lodging card businesses may be adversely affected.*” Because our business depends on the level of activity in the oil industry, existing or future laws or regulations related to GHGs and climate change, including incentives to conserve energy or use alternative energy sources, could have a negative impact on our business if such laws or regulations reduce demand for fuel.

In addition to the regulatory efforts described above, there have also been efforts in recent years aimed at the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities and other groups, promoting the divestment of fossil fuel equities as well as to pressure lenders and other financial services companies to limit or curtail activities with companies engaged in the extraction of fossil fuel reserves.

If these efforts are successful, our ability to access capital markets may be limited and our stock price may be negatively impacted.

Members of the investment community have recently increased their focus on sustainability practices with regard to the oil and gas industry, including practices related to GHGs and climate change.

An increasing percentage of the investment community considers sustainability factors in making investment decisions, and an increasing number of our partners and merchants consider sustainability factors in awarding work.

If we are unable to successfully address sustainability enhancement, we may lose partners or merchants, our stock price may be negatively impacted, our reputation may be negatively affected, and it may be more difficult for us to effectively compete.

For example, during parts of January 2014, severe winter weather shut down a large portion of the eastern U.S. Natural catastrophes such as hurricanes in east Texas (Hurricane Harvey) and in Florida (Hurricane Irma), each in 2017, wildfires in California in 2017 and 2018 and in Colorado in 2012 and flooding in Arkansas in 2019, had similar effects on a more local basis.

In December 2019 and January 2020, an outbreak of COVID-19, a new strain of coronavirus in Wuhan, China has resulted in travel disruption and has effected certain companies’ operations in China, although, at this point, the extent to which the coronavirus may impact our results is uncertain.

Furthermore, a party making such a claim, if successful,

The CFPB issued a final rule on prepaid accounts that came into effect on April 1, 2019.

The rule’s definition of prepaid account includes certain accounts that are capable of being loaded with funds and whose primary function is to conduct transactions with multiple, unaffiliated merchants, at ATMs or for person-to-person transfers.

Derivatives regulations have added costs to our business and any additional requirements,

such as future registration requirements and increased regulation of derivative contracts, may result in additional costs or impact the way we conduct our hedging activities, as well as impact how we conduct our business within our international payments provider operations.

In addition, we may be subject to investigation from time to time concerning our

The complaint alleges that the defendants made false or misleading statements regarding fee charges and the reasons for its earnings and growth in certain press releases and other public statements in violation of the federal securities laws, and seeks unspecified monetary damages, costs, and attorneys’ fees.

On October 3, 2019, the parties executed a term sheet to settle the case for a payment of $50 million for the benefit of the class.

The full settlement amount is covered by our insurance policies.

On December 12, 2019, the court granted the lead plaintiff’s motion for preliminary approval of the settlement.

We cannot be certain that the outcome of these matters will not have a material adverse result on us, our business, our financial condition or our results of operations.

We have received a Civil Investigative Demand from the Federal Trade Commission, along with proposals to resolve potential claims, arising from our advertising and marketing practices, which relate principally to our North American Fuel Card business.

If we are unable to maintain our current business or

| | |

| --- | --- |

We derive a significant portion of our revenue from program fees and charges paid by the users of our cards.

We depend, in part, on our merchant relationships to grow our business.

To grow our customer base in the closed loop fleet card and lodging card businesses, we must retain and add relationships with merchants who are located in areas where our customers purchase fuel, maintenance services and lodging.

We must maintain these relationships to effectively serve our customers that use these merchants.

If we are unable to maintain these relationships, our over-the-road fuel card businesses may be adversely affected.

We have expanded into new lines of business in the past and may do so in the future.

Further, we are

It is unclear whether, at that time, LIBOR will cease to exist or if new methods of calculating LIBOR will be established.

We also may never realize the anticipated benefits of the acquisitions.

In addition, in June 2016, voters in the United Kingdom approved an advisory referendum to withdraw from the European Union, commonly referred to as "Brexit." This referendum has created political and economic uncertainty, particularly in the United Kingdom and the European Union, and this uncertainty may persist for years.

A withdrawal could significantly disrupt the free movement of goods, services, and people between the United Kingdom and the European Union, and result in increased legal and regulatory complexities, as well as potential higher costs of conducting business in Europe.

Following the discovery of suspicious activity primarily on systems involving the Company’s gift card business, the Company took prompt

and quality of services offered.

For example, during parts of January 2014, severe winter weather shut down a large portion of the eastern United States.

If the carrying value of the asset is

the source code to the related technology or service, such use could inadvertently occur and any requirement to disclose our proprietary source code could be harmful to our business, financial condition and results of operations.

On January 25, 2018, the CFPB issued a final rule amending several aspects of its prepaid accounts rule adopted in October 2016 and delayed the overall effective date for such prepaid accounts rule to April 1, 2019.

The extensive nature of these regulations and the implementation dates for this additional rulemaking may result in additional compliance obligations and expense for our business.

BSA.

Derivatives Regulations

to our business.

Our actual or perceived failure to comply with such obligations could harm our business.

If we are found to have breached any consumer, eCommerce or similar legislation in any country, we may be subject to enforcement actions that require us to change our business practices in a manner which may negatively impact revenue, as well as litigation, fines, penalties and adverse publicity that could cause our customers to lose trust in us, which could have an adverse effect on our reputation and business in a manner that harms our financial position.

We collect personally identifiable information and other data from our customers.

Several foreign countries and governmental bodies, including the countries of the European Union and Canada, have laws and regulations which are often more restrictive than those in the United States.

The data privacy regime in the EU includes certain directives which, among other things, require European Union member states to regulate the processing and movement of personal data, marketing and the use of cookies.

Each European Union member state has transposed the requirements of these directives into its own national data privacy regime, and therefore the laws differ from jurisdiction to jurisdiction.

Future restrictions on the collection, use, sharing or disclosure of personally identifiable information or additional requirements and liability for security and data integrity could require us to modify our solutions and features, possibly in a material manner, and could limit our ability to develop new services and features.

For example, the EU-wide General Data Protection Regulation, or GDPR, which was passed by the European Union Parliament in the spring of 2016 and became fully effective in May 2018, replaced the data protection laws of each European Union member state.

The GDPR implements more stringent operational requirements for processors and controllers of personal data, including, for example, increased requirements to erase an individual’s information upon request, mandatory data breach notification requirements and new obligations on service providers.

It also significantly increases penalties for non-compliance, including where we act as a service provider (e.g., data processor).

If our privacy or data security measures fail to comply with applicable current or future laws and regulations, we may be subject to litigation, regulatory investigations, enforcement notices requiring us to change the way we use personal data or our marketing practices, fines, for example, of up to 20,000,000 Euros or up to 4% of the total worldwide annual turnover of the preceding financial year (whichever is higher) under the GDPR, or other liabilities, as well as negative publicity and a potential loss of business.

In February 2013, the European Commission proposed EU-wide legislation regarding cybersecurity in the form of the proposed Network and Information Security Directive, or the NIS Directive.

The NIS Directive requires EU member states to impose cybersecurity obligations-including data breach notification requirements-to operators of “essential services” and to “digital service providers.” The NIS Directive and its implementing legislation if held to apply to us may lead to compliance obligations that require us to change one or more aspects of the way we operate our business, which could increase our operating costs, and failure to comply may result in governmental enforcement actions, litigation, fines, penalties and adverse publicity.

We are also subject to various statutes, regulations, and rulings relevant to the direct email marketing and text-messaging industries, including the TCPA, the CAN-SPAM Act and related FCC orders.

The TCPA, as interpreted and implemented by the FCC and U.S. courts imposes significant restrictions on the use of telephone calls and text messages to residential and mobile telephone numbers as a means of communication when prior consent of the person being contacted has not been obtained.

Violations of the TCPA may be enforced by the FCC or by individuals through litigation, including class actions.

Statutory penalties for TCPA violations range from $500 to $1,500 per violation, which has been interpreted to mean per phone call.

[removed: RESULTS] [added: RESULTS] OF [removed: OPERATIONS][added: OPERATIONS]

[removed: General Business][added: General Business]

We serve businesses, [added: partners,] merchants and [removed: partners] [added: consumer and payment networks] in North America, Latin America, Europe, and [removed: Australasia.][added: Asia Pacific.]

We report these two segments as they [removed: align with our senior executive organizational structure,] reflect how we organize and manage our employees around the world, manage operating performance, contemplate the differing regulatory environments in North America versus other geographies, and help us isolate the impact of foreign exchange fluctuations on our financial results.

[added: FLEETCOR’s payment products generally function like a charge card, prepaid card, one-time use virtual card, and electronic RFID (radio-frequency identification), etc.] While the actual payment mechanisms vary from category to category, they are structured to afford control and reporting to the end [removed: user.][added: customer.]

[removed: Customers] [added: Each category is unique in its focus, customer base and target markets, but they also share a number of characteristics: customers] are primarily [removed: business to business,] [added: businesses,] have recurring revenue models, [added: have] specialized networks which create barriers to entry, have high EBITDA margins, and have similar selling [removed: systems, which can be leveraged in each business.][added: systems.]

Additionally, we provide other [added: complementary] payment products including fleet maintenance, employee benefits and long haul transportation-related services.

Our products are used in [removed: 82] [added: more than 100] countries around the world, with our primary geographies being the U.S., Brazil and the [removed: United Kingdom,] [added: U.K.,] which combined accounted for approximately [removed: 88%] [added: 87%] of our revenue in [removed: 2018.][added: 2019.]

FLEETCOR uses both proprietary and third-party networks to deliver [removed: our] [added: its] payment solutions.

[removed: Executive Overview][added: Executive Overview]

Our revenue is generally reported net of the cost for underlying products and [removed: services.][added: services purchased through our payment products.]

[removed: Revenues, net, by Segment.][added: | | | Revenues, net | | | | % of total revenues, net | | | Revenues, net | | | | % of total revenues, net | | |]

[added: Revenues, net, by Segment.] For the years ended December 31, [removed: 2018, 2017] [added: 2019] and [removed: 2016,] [added: 2018,] our North America and International segments generated the following revenue (in millions):

| | | [removed: Year] [added: Year] ended December [removed: 31, | | | | | |] [added: 31,] | | | | | | | | | | | | | |

| [added: Revenue by Geography*] | | [removed: Revenues, net] [added: Revenues, net] | | | | [removed: %] [added: %] of [removed: total revenues, net] [added: total revenues, net] | | | [removed: Revenues, net] [added: Revenues, net] | | | | [removed: %] [added: %] of [removed: total revenues, net | | | Revenues, net | | |] [added: total revenues, net] | [removed: % of total revenues, net] | |

| North America | | $ | [removed: 1,571] [added: 1,709] | | | [removed: 64.6] [added: 64.5] | % | | $ | [removed: 1,429] [added: 1,571] | | | [removed: 63.5] [added: 64.6] | % | | [removed: $ | 1,279 | | | 69.8 | % |]

| | | $ | [removed: 2,433] [added: 2,649] | | | 100.0 | % | | $ | [removed: 2,250] [added: 2,433] | | | 100.0 | % | | [removed: $ | 1,832 | | | 100.0 | % |]

[removed: Revenues, net, Net Income and] [added: |] Net [removed: Income Per Diluted Share.][added: income per diluted share | | $ | 9.94 | | | $ | 8.81 | | |]

[added: Revenues, net, Net Income and Net Income Per Diluted Share.] Set forth below are revenues, net, net income and net income per diluted share for the years ended December 31, [removed: 2018, 2017] [added: 2019] and [removed: 2016] [added: 2018] (in millions, except per share amounts).

| | | [removed: Year] [added: Year] ended December [removed: 31, | | |] [added: 31,] | | | | | | | |

| Revenues, net | | $ | [removed: 2,433] [added: 2,649] | | | $ | [removed: 2,250 | | | $] [added: 2,433] | [removed: 1,832] | |

| Net income | | $ | [removed: 811] [added: 895] | | | $ | [removed: 740 | | | $] [added: 811] | [removed: 452] | |

| [removed: Net] [added: Adjusted net] income per diluted share | | $ | [removed: 8.81] [added: 11.79] | | | $ | [removed: 7.91 | | | $] [added: 10.53] | [removed: 4.75] | |

[removed: Adjusted Net Income and] [added: |] Adjusted [removed: Net Income Per Diluted Share.][added: net income per diluted share | | $ | 11.79 | | | $ | 10.53 | |]

[added: Adjusted Net Income and Adjusted Net Income Per Diluted Share.] Set forth below are adjusted [removed: revenues, adjusted] net income and adjusted net income per diluted share for the years ended December 31, [removed: 2018, 2017] [added: 2019] and [removed: 2016] [added: 2018] (in millions, except per share amounts).

| | | [removed: Year] [added: Year] Ended December [removed: 31, | | |] [added: 31,] | | | | | | | |

| Adjusted net income | | $ | [removed: 969.8] [added: 1,062.1] | | | $ | [removed: 798.9 | | | $] [added: 969.8] | [removed: 659.2] | |

[removed: Sources] [added: Sources] of [removed: Revenue][added: Revenue]

[removed: Customers] [added: Our customers] may include commercial businesses (obtained through direct and indirect channels), [removed: as well as] partners for whom we manage payment [removed: programs.][added: programs, as well as individual consumers (for tolls).]

[removed: From our customers and partners, we] [added: We] generate revenue [added: in our fuel products] through a variety of program fees, including transaction fees, card fees, network fees and [removed: charges.][added: charges, as well as from interchange.]

These fees may be charged as fixed amounts, costs plus a mark-up, or based on a percentage of the transaction purchase [removed: amounts, or a combination thereof.]

Our programs [added: also] include other fees and charges associated with late payments and based on customer credit risk.

[removed: From our merchants and third-party networks,] [added: In corporate payments,] we [removed: generate] [added: primarily earn] revenue [removed: mostly] from the difference between the amount charged to [removed: a] [added: the] customer and the amount paid to the [removed: merchant or network] [added: third party] for a given [removed: transaction, as well] [added: transaction] as [removed: network fees and charges in certain businesses.][added: interchange revenue.]

[added: Revenues by geography and product category.] Set forth below [removed: is] [added: are further breakdowns of] revenue [removed: per transaction] by [removed: segment information] [added: geography and product category] for the years ended December 31, [removed: 2018, 2017] [added: 2019] and [removed: 2016.][added: 2018 (in millions).]

| | | [removed: Year ended] [added: Year Ended] December [removed: 31,] [added: 31,] | | | | | | | | | | | [added: | | | | Year Ended December 31, | | | | | | | | | | | | | |]

| [removed: (Unaudited)] [added: (Unaudited)] | | [removed: 2018] [added: 2019] | | | | [removed: 2017] | | | [added: 2018] | [removed: 2016] | | | [added: | | |]

| [added: '\-] Transactions [removed: (in millions)] | | [added: 56] | | | | [added: 49] | | | | [added: 6] | | | [added: | 13 | % | | 56 | | | | 50 | | | | 6 | | | | 12 | % |]

The following table provides [removed: a breakdown of] revenue per [removed: transaction by product and organic growth] [added: key performance metric] by product [added: category] for the years ended December 31, [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] (in [removed: millions,] [added: millions] except [added: revenues, net] per [removed: transaction data):*][added: transaction).*]

| | | [removed: As Reported] [added: As Reported] | | | | | | | | | | | | | | | [removed: Pro] [added: Pro] Forma and Macro [removed: Adjusted] [added: Adjusted] | | | | | | | | | | | | | |

| | | [removed: Year Ended December 31, | | | | | | | | | | | | | | | Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | |

The following discussion and analysis of our financial condition and results of operations generally discusses 2019 and 2018 items and year-over-year comparisons between 2019 and 2018.

A detailed discussion of 2017 items and year-over-year comparisons between 2018 and 2017 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2018.

FLEETCOR is a leading global business payment solutions company that simplifies the way businesses manage and pay their expenses.

The FLEETCOR portfolio of brands help companies automate, secure, digitize and control payments on behalf of their employees and suppliers.

We group our payment solutions into five primary categories: Fuel, Lodging, Tolls, Corporate Payments and Gift.

| | | 2019 | | | | | | | 2018 | | | | | | |

| International | | 940 | | | | 35.5 | % | | 862 | | | | 35.4 | % | |

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

| | | 2019 | | | | 2018 | | | |

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

| | | 2019 | | | | 2018 | | | |

FLEETCOR offers a variety of business payment solutions that help to simplify, automate, secure, digitize and effectively control the way businesses manage and pay their expenses.

We provide our payment solutions to our business, merchant, consumer and payment network customers in more than 100 countries around the world today, although we operate primarily in 3 geographies, with approximately 87% of our business in the U.S., the U.K. and Brazil.

Our products help our customers pay their suppliers and manage spend related to their employees more efficiently.

We have a variety of products that help our customers achieve these goals, primarily in five product categories: fuel, corporate payments, toll, lodging and gift.

Fuel represents approximately 44% of our revenues.

Our fuel cards and products help businesses monitor and control fuel spend across multiple fuel networks, providing online analytical reporting to help customers managing the efficiency of their vehicles and drivers, while offering potential discounts off of the retail price of fuel.

amounts, or a combination thereof.

Corporate payments represents approximately 19% of our revenues.

Our products help streamline B2B payments for vendors and employees, both domestically and internationally.

Our corporate payments products include virtual card solutions for invoice payments, corporate card programs, a fully-outsourced accounts payable solution, a payroll card solution for employers to distribute wages, as well as a cross-border payments product to facilitate customers making payments across differing currencies.

In our corporate payments products, a primarily measure of volume is spend, the dollar amount of payments processed on behalf of customers through our various networks.

Our programs may also charge fixed fees for access to the network and ancillary services provided.

Tolls represents approximately 13% of our revenues.

Our toll product is primarily delivered via an RFID sticker affixed to the windshield of a customer vehicle in Brazil.

This RFID enables customers to utilize toll roads, toll parking lots, pay for gas at partner stations and pay for drive-through food, via automated access and payment upon scan while remaining in the vehicle.

In our toll product, the relevant measure of volume is average monthly tags active during the period.

We primarily earn revenue from fixed fees for access to the network and ancillary services provided.

We also earn interchange on certain services provided.

Lodging represents approximately 8% of our revenues.

Our lodging products provide customers with a proprietary network of hotels with discounted room rates, centralized billing and robust reporting to help customers manage and control costs.

In our lodging products, we define a transaction as a hotel room night purchased by a customer.

Our products may also charge fees for access to the network and ancillary services provided.

Gift represents approximately 7% of our revenues.

We provide fully integrated gift card product management and processing services via plastic and digital gift cards to our customers.

We primarily earn revenue from the processing of gift card transactions sold by our customers to end users, as well as from the sale of the plastic cards.

FLEETCOR is a leading global provider of commercial payment solutions.

We help businesses of all sizes control, simplify and secure payment of various domestic and cross-border payables using specialized payment products.

FLEETCOR is a global payments company primarily focused on business to business payments.

We simplify the way businesses manage and pay for expenses and operate in five categories: Fuel, Lodging, Tolls, Corporate Payments and Gift.

Our products are focused on delivering a better, more efficient way to pay, through specialized products, systems, and payment and merchant networks.

The methods of payment generally function like a charge card, prepaid card, one-time use virtual card, and electronic RFID, etc. Each category is unique in its focus, customer base and target markets, but they also share a number of characteristics.

In 2018, we processed approximately 2.9 billion transactions within these networks, of which approximately 1.4 billion were related to our Gift product line.

Results presented for 2018 reflect the impact of the Company's adoption of Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" ("Topic 606") ("ASC 606") and related cost capitalization guidance, which was adopted by the Company on January 1, 2018, using the modified retrospective transition method.

The adoption of Topic 606 resulted in the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues.

As a result of the application of the modified retrospective transition method, the Company's prior period results within its annual report on Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect the impact of Topic 606.

The adoption of Topic 606 had the impact of reducing revenues by approximately $112.0 million for the year ended December 31, 2018.

Such expenses were not reflected as a reduction of revenues in the 2017 and 2016 amounts presented.

This lack of comparability should be considered in reviewing the transaction analysis and the various breakdowns of revenue by geography, product and source in this discussion and analysis.

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| | | | | | | | | | | | | | | | | | | | | | |

| | | 2018 | | | | | | | 2017 | | | | | | | 2016 | | | | | |

| International | | 862 | | | | 35.4 | % | | 821 | | | | 36.5 | % | | 552 | | | | 30.2 | % |

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| | | 2018 | | | | 2017 | | | | 2016 | | |

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | |

| | | 2018 | | | | 2017 | | | | 2016 | | |

| Adjusted net income per diluted share | | $ | 10.53 | | | $ | 8.54 | | | $ | 6.92 | |

Transactions.

In both of our segments, we derive revenue from transactions.

A transaction is defined as a purchase by a customer utilizing one of our payment products at a participating merchant.

The following diagram illustrates a typical transaction flow, which is representative of many, but not all, of our businesses.

Illustrative Transaction Flow


The revenue we derive from transactions is generated from both customers and merchants.

Merchants, who may also be customers under relevant accounting guidance, may include those merchants affiliated with our proprietary networks or those participating in the third-party networks we utilize.

The amount paid to a merchant or network may be calculated as (i) the merchant’s wholesale product cost plus a markup; (ii) the transaction purchase amount less a percentage discount; or (iii) the transaction purchase amount less a fixed fee per unit.

For a transaction involving the purchase of fuel where the amount paid to the merchant is calculated under the cost plus markup model, we refer to the difference between the amount charged to the customer and the amount paid to the merchant as revenue tied to fuel-price spreads.

In all other cases, we refer to the difference between the amount charged to the customer and the amount paid to the merchant for a given transaction as interchange revenue.

Revenue per transaction.

Revenue per transactions by segment is affected by the mix of products and acquisitions, as well as the impact of the adoption of ASC 606, which may result in revenue per transaction by product providing more meaningful data for analysis.

[removed: Foreign] [added: Foreign] currency [removed: risk][added: risk]

[removed: Foreign Earnings][added: *Foreign Earnings*]

Revenue from our International segment was [removed: 35.4%, 36.5%] [added: 35.5%, 35.4%] and [removed: 30.2%] [added: 36.5%] of total revenue for the years ended December 31, [added: 2019,] 2018, [removed: 2017,] and [removed: 2016,] [added: 2017,] respectively.

Exchange rates and currency positions as of December 31, [removed: 2018] [added: 2019] were used to perform the sensitivity analysis.

Such analysis indicated that a hypothetical 10% change in foreign currency exchange rates would have increased or decreased consolidated operating income during the year ended December 31, [removed: 2018] [added: 2019] by approximately [removed: $41.7] [added: $47.6] million had the U.S. dollar exchange rate increased or decreased relative to the currencies to which we had exposure.

When exchange rates and currency positions as of December 31, [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] were used to perform this sensitivity analysis, the analysis indicated that a hypothetical 10% change in currency exchange rates would have increased or decreased consolidated operating income for the years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] by approximately [removed: $34.2] [added: $41.7] million and [removed: $24.8] [added: $34.2] million, respectively.

[removed: Unhedged] [added: *Unhedged] Cross-Currency [removed: Risk][added: Risk*]

[removed: Interest] [added: Interest] rate [removed: risk][added: risk]

We are exposed to [removed: changes in] [added: the risk of changing] interest rates on our cash investments and [added: on the unhedged portion of our variable rate] debt.

Based on the amounts and mix of our fixed and floating rate debt (exclusive of our Securitization Facility) at December 31, [removed: 2018, 2017] [added: 2018] and [removed: 2016,] [added: 2017,] if market interest rates had increased or decreased an average of 100 basis points, our interest expense would have changed by approximately $37.9 [removed: million, $34.7] million and [removed: $27.9] [added: $34.7] million, respectively.

[removed: On] [added: In] January [removed: 22,] 2019, we entered into three interest rate swap cash flow contracts with U.S. dollar notional amounts of $1 billion with a fixed rate of 2.56%, $500 million with a fixed rate of 2.56%, and $500 million with a fixed rate of [removed: 2.55%.][added: 2.55% maturing on January 31, 2022, January 31, 2023 and December 19, 2023, respectively.]

[removed: Fuel] [added: Fuel] price [removed: risk][added: risk]

[removed: Fuel-price] [added: Fuel-price] spread [removed: risk][added: risk]

We have utilized International segment operating income as a proxy for foreign earnings.

As of December 31, 2019, we had $4.02 billion of variable rate debt outstanding under our Credit Agreement.

See footnote 11 of the accompanying consolidated financial statement for information about the Credit Agreement.

We use derivative financial instruments to reduce our exposure related to changes in interest rates.

For each of these swap contracts, we will receive one month LIBOR.

While these agreements are intended to lessen the impact of rising interest rates on us, they also expose us to the risk that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective cash flow hedges under U.S. GAAP.

See footnote 17 of the accompanying consolidated financial statements for information about the swap contracts.

If market interest rates had increased or decreased an average of 100 basis points and assuming we had an outstanding balance on our credit facility and term loans of $2.02 billion not fixed by interest rate swap contracts at December 31, 2019, our interest expense would have changed by approximately $20.2 million.

We use our excess cash either to pay down our Securitization Facility debt or to invest in securities that we believe are highly liquid and marketable in the short term.

These investments are not held for trading or other speculative purposes.

Our $4.16 billion Credit Agreement provides for senior secured credit facilities consisting of a revolving A credit facility in the amount of $1.285 billion, a term loan A facility in the amount of $2.53 billion and a term loan B facility in the amount of $350.0 million as of December 31, 2018.

The revolving credit facility consists of (a) a revolving A facility in the amount of $800.0 million, with sublimits for letters of credit and swing line loans, (b) a revolving B facility in the amount of $450.0 million with multi-currency borrowings and a sub-limit for swing line loans and, (c) a revolving C facility in the amount of $35.0 million for borrowings in U.S. Dollars, Australian Dollars or New Zealand Dollars.

Interest on amounts outstanding under the Credit Agreement (other than the term B loan) accrues based on the British Bankers Association LIBOR Rate (the Eurocurrency Rate), plus a margin based on a leverage ratio, or our option, the Base Rate (defined as the rate equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the prime rate announced by Bank of America, N.A., or (c) the Eurocurrency Rate plus 1.00%) plus a margin based on a leverage ratio.

Interest on the term B loan facility accrues based on the Eurocurrency Rate plus 2.00% for Eurocurrency Loans and at the Base Rate plus 1.00% for Base Rate Loans.

In addition, the Company pays a quarterly commitment fee at a rate per annum ranging from 0.20% to 0.40% of the daily unused portion of the credit facility.

The

purpose of these contracts is to eliminate the variability of cash flows in interest payments associated with $2 billion of our variable rate debt, the sole source of which is due to changes in the 1-month LIBOR benchmark interest rate.

[removed: General][added: General]

We serve businesses, [added: partners,] merchants and [removed: consumers] [added: consumer] and payment networks in North America, Latin America, Europe, and [removed: Australasia.][added: Asia Pacific.]

We report these two segments as they [removed: align with our senior executive organizational structure,] reflect how we organize and manage our employees around the world, manage operating performance, contemplate the differing regulatory environments in North America versus other geographies, and help us isolate the impact of foreign exchange fluctuations on our financial results.

[added: FLEETCOR’s payment products generally function like a charge card, prepaid card, one-time use virtual card, and electronic RFID (radio-frequency identification), etc.] While the actual payment mechanisms vary from category to category, they are structured to afford control and reporting to the end [removed: user.][added: customer.]

[removed: Customers] [added: Each category is unique in its focus, customer base and target markets, but they also share a number of characteristics: customers] are primarily [removed: business to business,] [added: businesses,] have recurring revenue models, [added: have] specialized networks which create barriers to entry, have high EBITDA margins, and have similar selling [removed: systems, which can be leveraged in each business.][added: systems.]

Additionally, we provide other [added: complementary] payment products including fleet maintenance, employee benefits and long haul transportation-related services.

Our [removed: products] [added: payment solutions] are used in [removed: 82] [added: more than 100] countries around the world, with our primary geographies being the U.S., Brazil and the United Kingdom, which combined accounted for approximately [removed: 88%] [added: 87%] of our revenue in [removed: 2018.][added: 2019.]

[removed: Products] [added: Products] and [removed: services][added: services]

Our customers can use these data, controls and tools to [removed: lower their operating costs, and] combat fraud and employee [removed: misuse and] [added: misuse,] streamline expense [removed: administration.][added: administration and potentially lower their vehicle fleets’ operating costs.]

[removed: Fuel] [added: Fuel] payment product [removed: line][added: line]

Our fuel payment product line is our largest product category, representing approximately [removed: 45%] [added: 44%] of our revenue in [removed: 2018.][added: 2019.]

Our fuel payment product partners include British Petroleum (BP), its subsidiary Arco, Shell, Speedway, and Casey's and over [removed: 770] [added: 700] fuel marketers of all sizes.

Our contracts with our major oil company partners typically have initial terms of five to ten years with current remaining terms ranging from one to [removed: eight] [added: seven] years.

[removed: North] [added: North] America proprietary networks for fuel payment [removed: products][added: products]

| • | [removed: Fuelman network—our] [added: Fuelman network—our] primary proprietary fleet card network in the U.S. We have negotiated card acceptance and settlement terms with over [removed: 9,300] [added: 10,400] individual merchants, providing the Fuelman network with approximately 55,000 fueling sites and approximately 25,000 maintenance sites across the country. |

| • | [removed: Comdata network—our] [added: Comdata network—our] network of truck stops and fuel merchants for the over-the-road trucking industry. We have negotiated card acceptance and settlement terms at over [removed: 8,700] [added: 8,600] truck stops and fuel merchants across the U.S. and Canada. |

| • | [removed: Commercial] [added: Commercial] Fueling Network [removed: (CFN)—our] [added: (CFN)—our] “members only” fueling network in the U.S. and Canada composed of [removed: over 2,500] [added: approximately 2,600] fueling sites owned by CFN members themselves. The majority of these fueling sites are unattended cardlock facilities located in commercial and industrial areas. |

| • | [removed: Pacific] [added: Pacific] Pride Fueling [removed: network—our] [added: network—our] "franchise" fueling network in the U.S. composed of [removed: over] [added: approximately] 1,100 fueling sites owned by more than [removed: 230] [added: 220] franchisees. The majority of these fueling sites are unattended cardlock facilities located in commercial and industrial areas. |

[removed: International] [added: International] proprietary networks for fuel payment [removed: products][added: products]

| • | [removed: Allstar network—our] [added: Allstar network—our] proprietary fleet card network in the U.K. We have negotiated card acceptance and settlement terms with approximately 2,100 individual merchants, providing this network with approximately 7,300 fueling sites. |

| • | [removed: Keyfuels network—our] [added: Keyfuels network—our] proprietary fleet card network in the U.K. We have negotiated card acceptance and settlement terms with more than 500 individual merchants, providing the Keyfuels network with approximately [removed: 2,900] [added: 3,000] fueling sites. |

| • | [removed: CCS network—our] [added: CCS network—our] primary proprietary fleet card network in the Czech Republic and Slovakia. We have negotiated card acceptance and settlement terms with several major oil companies on a brand-wide basis, including MOL, Benzina, OMV, Slovnaft and Shell, and with approximately [removed: 1,100] [added: 1,200] other merchants, providing the CCS network at over [removed: 2,700] [added: 2,800] fueling sites and [removed: 800] [added: 700] other sites accepting our cards. |

| • | [removed: Petrol] [added: Petrol] Plus Region (PPR) [removed: network—our] [added: network—our] primary proprietary fleet card network in Russia, [removed: Poland,] Ukraine, [removed: Belarus, Kazakhstan] [added: Belarus] and [removed: Moldova.] [added: Kazakhstan.] We have negotiated card acceptance and settlement terms with over [removed: 900] [added: 600] individual merchants, providing the PPR network with approximately [removed: 13,400] [added: 13,300] fueling sites across the region. |

| • | [removed: Efectivale network—our] [added: Efectivale network—our] proprietary fuel card and voucher network in Mexico. We have negotiated acceptance and settlement terms individual merchants, providing the network with over [removed: 7,800] [added: 8,300] fueling sites. |

| • | [removed: CTF network—our] [added: CTF network—our] proprietary fuel and fleet controls solutions in Brazil, composed of over 23,000 highway and urban fueling sites through our partners, BR Distribuidora [removed: (Petrobas), Ipiranga Distribuidora] [added: (Petrobas)] and [removed: Good Card network.] [added: Ipiranga Distribuidora.] |

| • | [removed: Travelcard network—our] [added: Travelcard network—our] proprietary fuel card network in the Netherlands. We have negotiated card acceptance and settlement terms with over [removed: 1,000] [added: 1,500] individual merchants, providing this network [removed: with approximately 4,100] [added: over 7,600] fueling sites. |

| • | [removed: Fleet] [added: Fleet] Card [removed: network—our] [added: network—our] proprietary fuel card network in Australia. We have negotiated card acceptance and settlement terms with approximately 6,000 individual merchants, providing this network with over 90% of fuel sites across Australia. |

| • | [removed: CardSmart network—our] [added: CardSmart network—our] proprietary fuel card network in New Zealand. We have negotiated card acceptance and settlement terms with approximately 1,200 individual merchants, providing this network with approximately 95% of the fuel sites across New Zealand. |

[removed: Third-Party] [added: Third-Party] networks for fuel payments [removed: products][added: products]

| • | [removed: Mastercard network—In] [added: Mastercard network—In] the U.S. and Canada, we issue co-branded Mastercard products, which are accepted at over [removed: 175,000] [added: 176,000] fuel sites and [removed: 469,000] [added: 398,000] maintenance locations. These Mastercard products have additional purchasing capabilities which, when enabled, allow the cards to be accepted at approximately 10.9 million locations throughout the U.S. and Canada. |

| • | [removed: Visa network—In] [added: Visa network—In] the U.K., we issue products that utilize the Visa payment network, which includes approximately 8,400 fuel sites and [removed: over 1,400] [added: approximately 1,700] maintenance locations. These Visa products have additional purchasing capabilities which, when enabled, allow the cards to be accepted throughout the Visa network. |

| [removed: •] [added: •] | [removed: Major] [added: Major] oil and fuel marketer [removed: networks—The] [added: networks—The] proprietary networks of branded locations owned by our major oil and fuel marketer partners in both North America and internationally are generally utilized to support the proprietary, branded card programs of these partners. |

| • | [removed: UTA network—UNION] [added: UTA network—UNION] TANK Eckstein GmbH & Co. KG (UTA) operates a network of over 61,000 points of acceptance in 40 European countries, including more than 49,000 fueling sites. The UTA network is generally utilized by European transport companies that travel between multiple countries. |

| • | [removed: DKV network—DKV] [added: DKV network—DKV] operates a network of over [removed: 70,000] [added: 100,000] fleet card-accepting locations across more than [removed: 40] [added: 42] countries throughout Europe. The DKV network is generally utilized by European transport companies that travel between multiple countries. |

| • | [removed: Carnet networks—A] [added: Carnet network—A] national debit network in Mexico, which includes approximately [removed: 12,500] [added: 12,700] fueling sites across the country. |

In Brazil, we have designed proprietary [removed: RFID] equipment which, when installed at the fueling [removed: site, parking lot, fueling station and restaurant] [added: site] and on the vehicle and combined with our processing system, significantly reduces the likelihood of unauthorized and fraudulent transactions.

[removed: Long] [added: *Long] haul transportation [removed: services][added: services*]

[removed: Lodging] [added: Lodging] payment product [removed: line][added: line]

We offer lodging payment solutions to businesses in North America that have employees who travel overnight for work [removed: purposes.][added: purposes, and to airlines globally to accommodate both their traveling crews and distressed passengers whose flights have been canceled.]

We offer [removed: two] [added: card-based] lodging payment [removed: products, a card-based solution] [added: products] for individual [added: business] travelers and non-card based [removed: solution] [added: solutions] for [removed: crews.][added: crews and distressed passengers.]

FLEETCOR is a leading global business payment solutions company that simplifies the way businesses manage and pay their expenses.

The FLEETCOR portfolio of brands help companies automate, secure, digitize and control payments on behalf of their employees and suppliers.

We group our payment solutions into five primary categories: Fuel, Lodging, Tolls, Corporate Payments and Gift.

| • | Good Card network—In Brazil, we issue co-branded Good Card products, which are accepted at over 23,000 fuel sites. |

The integration of our processing systems with airline logistics and crew management systems also enables us to deliver enhanced services to that industry vertical.

However, merchants affiliated to the MasterCard network are not obligated to accept virtual cards as a form of payment.

As such, merchants must be enrolled into our proprietary vendor network to accept our virtual card product.

processes transactions for fleet customers through approximately 8,700 service centers across the U.K. With regard to our fleet maintenance products, we compete with several companies including Ebbon-Dacs and Fleet on Demand.

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| --- | --- |

Our technology

In 2019, we achieved 99.9% up-time for authorizations globally.

Failure to

See “*Anti-Money Laundering and Counter Terrorist Regulations*.”

See “*Payment Card Industry Rules*.”

Email and Text Marketing Laws

communication when prior consent of the person being contacted has not been obtained.

FCC regulations promulgated under the CAN-SPAM Act establish requirements for “commercial messages,” give recipients the right to have companies stop emailing them, and spells out penalties for violations.

Commercial messages are defined as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service,” including email that promotes content on commercial websites.

The law makes no exception for business-to-business email.

Each separate email in violation of the CAN-SPAM Act is subject to penalties of up to $43,280.

In addition to economic sanctions programs, we are also subject to international laws and regulations focused on fighting terrorism and money laundering:

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| --- | --- |

| • | in Australia, as a registered remittance dealer with AUSTRAC, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act); and |

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| • | in the UK, as a registered Electronic Money Institution with the Financial Conduct Authority, the Proceeds of Crime Act, 2002 (as amended by the Serious Organised Crime and Police Act 2005), and the Terrorism Act 2000 (as amended by the Anti-Terrorism, Crime and Security Act 2001 and the Terrorism Act 2006). |

restrictions.

Our subsidiary, Comdata Inc., is PCI 3.2 compliant.

The CFPB issued a final rule on prepaid accounts that came into effect on April 1, 2019.

The definition of prepaid account under this rule includes certain accounts that are capable of being loaded with funds and whose primary function is to conduct transactions with multiple, unaffiliated merchants, at ATMs or for person-to-person transfers.

The requirements under this rule include, among other things, the disclosure of fees and other information to the consumer prior to the creation of a prepaid account; the extension of Regulation E liability limits and error-resolution requirements to all prepaid accounts; the application of Regulation Z credit card requirements to prepaid accounts with overdraft and credit features; and the submission of prepaid account agreements to the CFPB and the publication of such agreements to the general public.

To the extent that these usury

Derivatives Regulations

Rules adopted under the Dodd-Frank Act by the Commodity Futures Trading Commission (the “CFTC”), as well as the provisions of the European Market Infrastructure Regulation and its technical standards, which are directly applicable in the member states of the European Union, have subjected certain of the foreign exchange derivative contracts we offer to our customers as part of the Cambridge Global Payments (“Cambridge”) business, to reporting, recordkeeping, and other requirements.

Additionally, certain foreign exchange derivatives transactions we may enter into in the future may be subject to centralized clearing requirements, or may be subject to margin requirements in the United States and European Union.

Other jurisdictions outside the United States and the European Union are considering, have implemented, or are implementing regulations similar to those described above.

FLEETCOR is a leading global provider of commercial payment solutions.

We help businesses of all sizes control, simplify and secure payment of various domestic and cross-border payables using specialized payment products.

FLEETCOR is a global payments company primarily focused on business to business payments.

We simplify the way businesses manage and pay for expenses and operate in five categories: Fuel, Lodging, Tolls, Corporate Payments and Gift.

Our products are focused on delivering a better, more efficient way to pay, through specialized products, systems, and payment and merchant networks.

The methods of payment generally function like a charge card, prepaid card, one-time use virtual card, and electronic RFID (radio-frequency identification), etc. Each category is unique in its focus, customer base and target markets, but they also share a number of characteristics.

In 2018, we processed approximately 2.9 billion transactions within these networks, of which approximately 1.4 billion were related to our Gift product line.

Our payment products typically function like a charge card or prepaid card.

FLEETCOR provides a variety of payment mechanisms such as a plastic card, electronic tag, or other form to the customer.

We issue credit to the customer (or accept prepaid funds from the customer) to allow for purchases using the payment product.

FLEETCOR then reports the purchases to the customer and invoices (or debits prepaid amounts) for payment of purchases made on the customer’s account.

Payment networks are integral to our solutions, as they allow us to electronically connect to merchants and capture transaction data from the point of sale.

We use both proprietary and third-party networks to deliver our payment solutions.

For our proprietary networks, FLEETCOR provides merchant acquiring services, which may include affiliation, contract management, point-of-sale terminals, reporting and settlement.

FLEETCOR owns and operates proprietary networks with well-established brands across 80 countries, bringing incremental sales and loyalty to affiliated merchants.

Third-party networks include Mastercard in the U.S. and Visa in the U.K. and continental Europe, the retail outlets of various partners, and proprietary networks owned and operated by other partners.

We use these third-party networks in order to broaden our payment product acceptance and use.

Through our proprietary and third-party networks, we capture detailed transaction data and can often enable advanced purchase controls at the point-of-sale.

We support our payment products with specialized issuing, processing and information services that enable us to manage customer accounts, facilitate the routing, authorization, clearing and settlement of transactions, and provide value-added functionality and data, including customizable user-level controls and productivity analysis tools.

Depending on our customers’ and partners’ needs, we provide our products and services in a variety of combinations ranging from a comprehensive “end-to-end” solution (encompassing issuing, processing and network services) to limited back office processing services.

Our customers can use these data, controls and tools to combat fraud and employee misuse, streamline expense administration and lower their vehicle fleets’ operating costs.

In 2018, we experienced 99.9% up-time for authorizations.

Many states require prior approval for both direct and indirect changes of control of the licensee and certain other corporate events.

In addition, the State of California adopted the California Consumer Protection Act of 2018 ("CCPA"), which will become effective in 2020 and also will regulate the collection and use of consumers' data.

Compliance with the CCPA is expected to cause us to make additional updates to certain business practices and systems.

In February 2013, the European Commission proposed additional European Union-wide legislation regarding cyber security in the form of the proposed NIS Directive.

The NIS Directive was adopted by the European Parliament in July 2016 and entered into force in August 2016.

The NIS Directive provides legal measures intended to boost the overall level of cybersecurity in the EU by ensuring: (1) Member States’ preparedness by requiring them to be appropriately equipped, for example, via a Computer Security Incident Response Team and a competent national NIS authority; (2) cooperation among all the Member States, by setting up a cooperation group, in order to support and facilitate strategic cooperation and the exchange of information among Member States; and (3) a culture of security across sectors vital to the EU’s economy and society, including banking, financial market infrastructures and digital infrastructure.

As a processor of personal data of EU data subjects, we are also subject to regulation and oversight in the applicable EU Member States with regard to data protection legislation.

Our EU operations are currently operating in accordance with these standards.

The GDPR, which replaced in May 2018 the prior Directive 95/46/EC, also known as the existing Data Protection Directive, contains various obligations on the processing of personal data in the EU including restrictions on transferring personal data outside of the EU to countries which have not been recognized as having adequate data protection standards, unless specific conditions are met.

Our EU operations are currently operating in accordance with these standards.

While the core rules contained in the Data Protection Directive are retained in GDPR, there are significant enhancements with regard to the rights of data subjects (which include the right to be forgotten and the right of data portability), stricter regulation on obtaining consent to processing of personal data and sensitive personal data, stricter obligations with regard to the information to be included in privacy notices and significant enhanced requirements with regard to compliance, including a regime of “accountability” for processors and controllers and a requirement to embed compliance with GDPR into the fabric of an organization by developing appropriate policies and practices, to achieve a standard of data protection by “design and default.” The GDPR includes enhanced data security obligations (to run in parallel to those contained in NIS regulations), requiring data processors and controllers to take appropriate technical and organizational measures to protect the data they process and their systems.

Organizations that process significant amounts of data may be required to appoint a Data Protection Officer responsible for reporting to highest level of management within the business.

There are greatly enhanced sanctions under GDPR for failing to comply with the core principles of the GDPR or failing to secure data.

In addition, there are state laws restricting the ability to collect and utilize certain types of information such as Social Security and driver’s license numbers.

Certain state laws impose similar privacy obligations as well as obligations to provide notification of security breaches of computer databases that contain personal information to affected individuals, state officers and consumer reporting agencies and businesses and governmental agencies that own data.

Our subsidiary, Comdata Inc., is PCI 3.2 compliant and its Attestation of Compliance is listed on Mastercard’s compliant service provider listing.

Failure to maintain compliance with updates to PCI data security standards including having effective technical and administrative safeguards and policies and procedures could result in fines and assessments from payment networks and regulatory authorities, as well as litigation.

laundering.

[removed: Shareholder] [added: *Shareholder] Class Action and Derivative [removed: Lawsuits][added: Lawsuits*]

On October 13, 2017, the shareholder filed an amended complaint asserting claims on behalf of a [removed: putative] class of all persons who purchased or otherwise acquired the Company's common stock between February 4, 2016 and May 3, 2017.

[removed: Plaintiff] [added: The complaint] seeks [removed: class certification,] unspecified monetary damages, costs, and attorneys’ fees.

On July 10, 2017, a shareholder derivative complaint was filed against the Company and certain of the Company’s directors and officers in the United States District Court for the Northern District of Georgia [added: (“Federal Derivative Action”)] seeking recovery on behalf of the Company.

The [removed: derivative complaint] [added: Federal Derivative Action] alleges that the defendants issued a false and misleading proxy statement in violation of the federal securities laws; that defendants breached their fiduciary duties by causing or permitting the Company to make allegedly false and misleading public statements concerning the Company’s fee charges, and financial and business prospects; and that certain defendants breached their fiduciary duties through allegedly improper sales of stock.

On September 20, 2018, the court entered an order deferring the [removed: case] [added: Federal Derivative Action] pending a ruling on [removed: the parties’ anticipated] motions for summary judgment in the [removed: putative] shareholder class action, [added: notice a settlement has been reached in the shareholder class action,] or until otherwise agreed to by the parties.

[added: On the parties’ joint motion, the court has continued the stay of the State Derivative Action “pending further developments in the first-filed Federal Derivative Action.”] The defendants dispute the allegations in the derivative complaints and intend to vigorously defend against the claims.

On July 17, 2019, the court granted plaintiff's motion for class certification.

On October 3, 2019, the parties executed a term sheet to settle the case for a payment of $50 million for the benefit of the class.

The full settlement amount is covered by the Company’s insurance policies.

On December 12, 2019, the court granted the lead plaintiff’s motion for preliminary approval of the settlement.

The Company disputes the allegations in the complaint and the settlement is without any admission of the allegations in the complaint.

After preliminary approval of the proposed settlement of the shareholder class action was granted, the stay on the Federal Derivative Action was lifted.

Plaintiffs amended their complaint on February 22, 2020 and FleetCor has an April 10, 2020 date by which to move to dismiss or otherwise respond to the amended complaint in the Federal Derivative Action.

On January 9, 2019, a similar shareholder derivative complaint was filed in the Superior Court of Gwinnett County, Georgia (“State Derivative Action”), which was stayed pending a ruling on motions for summary judgment in the shareholder class action, notice a settlement has been reached in the shareholder class action, or until otherwise agreed by the parties.

*FTC Investigation*

In October 2017, the Federal Trade Commission (“FTC”) issued a Notice of Civil Investigative Demand to the Company for the production of documentation and a request for responses to written interrogatories.

After discussions with the Company, the FTC proposed in October 2019 to resolve potential claims relating the Company’s advertising and marketing practices, principally in its U.S. direct fuel card business within its North American Fuel Card business.

The parties reached impasse primarily related to what the Company believes are unreasonable demands for redress made by the FTC.

On December 20, 2019, the FTC filed a lawsuit in the Northern District of Georgia against the Company and Ron Clarke.

See FTC v.

FleetCor and Ronald F.

Clarke, No. 19-cv-05727 (N.D. Ga.).

The complaint alleges the Company and Clarke violated the FTC Act’s prohibitions on unfair and deceptive acts and practices.

The complaint seeks among other things injunctive relief, consumer redress, and costs of suit.

The Company continues to believe that the FTC’s claims are without merit.

The Company has incurred and continues to incur legal and other fees related to this complaint.

Any settlement of this matter, or defense against the lawsuit, could involve costs to the Company, including legal fees, fines, penalties, and remediation expenses.

At

this time, in view of the complexity and ongoing nature of the matter, we are unable to estimate a reasonably possible loss or range of loss that we may incur to settle this matter or defend against the lawsuit brought by the FTC.

The Company disputes the allegations in the complaint and intends to vigorously defend against the claims.

On January 9, 2019, a similar shareholder derivative complaint was filed in the Superior Court of Gwinnett County, Georgia.

On February 1, 2019, Schultz Transfer Systems, Inc. filed a complaint against Fleetcor Technologies Operating Company, LLC (“Fleetcor LLC”) in the United States District Court for the Northern District of Georgia.

The plaintiff alleges that it is a Fleetcor LLC customer and member of the Fuelman program, and that Fleetcor LLC overcharged the plaintiff for fees and fuel through the Fuelman program.

Based on these allegations, the plaintiff asserts claims for breach of contract, breach of the covenant of good faith and fair dealing, fraud, fraudulent concealment, money had and received, and unjust enrichment.

The plaintiff seeks to represent a class defined as all persons, including corporate entities, who were enrolled in the Fuelman program between June 2016 and the present.

Fleetcor LLC’s response to the complaint is not yet due.

Fleetcor LLC disputes the allegations in the complaint and intends to defend itself vigorously against these claims.

Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, and are in the stages of the proceedings where key factual and legal issues have not been resolved.

For these reasons, we are currently unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from the matters described above.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

| [removed: ý] [added: ☒] | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the Fiscal Year [removed: Ended December] [added: Ended December] 31, [removed: 2018][added: 2019]

| [removed: ¨] [added: ☐] | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the Transition Period [removed: From to][added: From to]

[removed: Commission] [added: Commission] File [removed: Number 001-35004][added: Number 001-35004]

[removed: FLEETCOR] [added: FLEETCOR] TECHNOLOGIES, [removed: INC.][added: INC.]

| [removed: DELAWARE] [added: Delaware] | | [removed: 72-1074903] | [added: 72-1074903 |]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: COMMON STOCK,] [added: Common Stock,] $0.001 [removed: PAR VALUE PER SHARE] [added: par value per share] | [added: FLT] | [removed: NEW YORK STOCK EXCHANGE] [added: NYSE] |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the [removed: Act:][added: Act:]

[removed: NONE][added: NONE]

Yes [removed: ý] [added: ☒] No [removed: ¨][added: ☐]

Yes [removed: ¨] [added: ☐] No [removed: ý][added: ☒]

Yes [removed: ý] [added: ☒] No [removed: ¨][added: ☐]

Yes [removed: ý] [added: ☒] No [removed: ¨][added: ☐]

| Large accelerated filer | | [removed: ý] [added: ☒] | | Accelerated filer | | [removed: ¨] [added: ☐] |

| Non-accelerated filer | | [removed: ¨] [added: ☐] (Do not check if a smaller reporting company) | | Smaller reporting company | | [removed: ¨] [added: ☐] |

| Emerging growth company | | [removed: ¨] [added: ☐] | | | | |

Yes [removed: ¨] [added: ☐] No [removed: ý][added: ☒]

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately [removed: $18,448,083,043] [added: $23,926,076,537] as of June 30, [removed: 2018,] [added: 2019,] the last business day of the registrant’s most recently completed second fiscal quarter, based on the closing sale price as reported on the New York Stock Exchange.

As of February [removed: 8, 2019,] [added: 7, 2020,] there were [removed: 85,858,421] [added: 85,429,057] shares of common stock outstanding.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of the registrant’s definitive Proxy Statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held on June [removed: 12, 2019] [added: 11, 2020] are incorporated by reference into Part III of this report.

[removed: FLEETCOR] [added: FLEETCOR] TECHNOLOGIES, [removed: INC.][added: INC.]

[removed: FORM 10-K][added: FORM 10-K]

[removed: For] [added: For] The Year [removed: Ended December] [added: Ended December] 31, [removed: 2018][added: 2019]

[removed: INDEX][added: INDEX]

| | | [removed: Page] [added: Page] |

| [removed: PART I] [added: PART I] | | |

| Item 1. | [removed: [Business](#s07933066C5A85649A823B572974A7430)] [added: [Business](#s3DB79A8C78EA59579411DE064D226306)] | [removed: [4](#s07933066C5A85649A823B572974A7430)] [added: [4](#s3DB79A8C78EA59579411DE064D226306)] |

| Item X. | [Executive Officers of the [removed: Registrant](#sB652C76B77685951BD34903E0F116B0A)] [added: Registrant](#sE0A21BCD248057FBBD960593BC1C6D40)] | [removed: [20](#sB652C76B77685951BD34903E0F116B0A)] [added: [19](#sE0A21BCD248057FBBD960593BC1C6D40)] |

| Item 1A. | [Risk [removed: Factors](#s43B178076A4E50C695441874918B0A6D)] [added: Factors](#s2391F0C103CD54BBA5E45316FBC47392)] | [removed: [21](#s43B178076A4E50C695441874918B0A6D)] [added: [20](#s2391F0C103CD54BBA5E45316FBC47392)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#s3E0A355B22355223A492770D977AC8B8)] [added: Comments](#s8D1053118818507ABF5916DF98EC82A9)] | [removed: [41](#s3E0A355B22355223A492770D977AC8B8)] [added: [40](#s8D1053118818507ABF5916DF98EC82A9)] |

| Item 2. | [removed: [Properties](#s6FA8786C73E555E6A2BB96C802B40DF9)] [added: [Properties](#s3D67F24E9B4A5F95A9BBC621971FE336)] | [removed: [42](#s6FA8786C73E555E6A2BB96C802B40DF9)] [added: [41](#s3D67F24E9B4A5F95A9BBC621971FE336)] |

| Item 3. | [Legal [removed: Proceedings](#sEB4E6438272E556FAD9E50BAF0D7A045)] [added: Proceedings](#s259B59DD777256A6BD5E3D10E6C0068B)] | [removed: [44](#sEB4E6438272E556FAD9E50BAF0D7A045)] [added: [43](#s259B59DD777256A6BD5E3D10E6C0068B)] |

| Item 4. | [Mine Safety [removed: Disclosures](#sE7FC2CA212CB59629344ECB50D8AC756)] [added: Disclosures](#sEE39B62541CF52469A3A04F4E837A6A7)] | [removed: [44](#sE7FC2CA212CB59629344ECB50D8AC756)] [added: [44](#sEE39B62541CF52469A3A04F4E837A6A7)] |

OR

| | | | |

| --- | --- | --- | --- |

| | | | |

| (State or other jurisdiction of incorporation or organization) | | | (I.R.S. Employer Identification No.) |

| | | | |

| 3280 Peachtree Road, Suite 2400, | Atlanta, | Georgia | 30305 |

| (Address of principal executive offices) | | | (Zip Code) |

Registrant’s telephone number, including area code: (770) 449-0479

| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |

| Item 16. | [Form 10-K Summary](#s3db216205c904720a3ebfe0f696ad2a3) | [124](#s152EAFDF245A5217AD46BAFD222B633E) |

| | [Signatures](#s488F2D5D225A5A8B9CCF773F97D7B83D) | [129](#s488F2D5D225A5A8B9CCF773F97D7B83D) |

These forward-looking statements may not be realized due to a variety of factors, including, without limitation:

| | |

| --- | --- |

| • | the impact of macroeconomic conditions and whether expected trends, including in retail fuel prices, fuel price spreads, and fuel transaction patterns, develop as anticipated; |

| | |

| --- | --- |

| • | our ability to successfully execute our strategic plan, manage our growth and achieve our performance targets; |

| | |

| --- | --- |

| • | our ability to attract new and retain existing partners, fuel merchants, and lodging providers, their promotion and support of our products, and their financial performance; |

| | |

| --- | --- |

| • | the failure of management assumptions and estimates, as well as differences in, and changes to, economic, market, interest rate, interchange fees, foreign exchange rates, and credit conditions, including changes in borrowers’ credit risks and payment behaviors; |

| | |

| --- | --- |

| • | the risk of higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; |

| | |

| --- | --- |

| • | our ability to successfully manage our credit risks and the sufficiency of our allowance for possible loan losses; |

| | |

| --- | --- |

| • | our ability to securitize our loan receivables; |

| | |

| --- | --- |

| • | the occurrence of fraudulent activity, data breaches or failures of our information security controls or cybersecurity-related incidents that may compromise our systems or customers’ information; |

| | |

| --- | --- |

| • | any disruptions in the operations of our computer systems and data centers; |

10-K 1 flt_10-kx12312018.htm 10-K

OR

| | | |

| --- | --- | --- |

| | | |

| (STATE OF INCORPORATION) | | (I.R.S. ID) |

5445 Triangle Parkway, Suite 400, Peachtree Corners, Georgia 30092-2575

(770) 449-0479

| | | |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

| | [Signatures](#sD10D9E9D3EB05AA5A2A84AE8A59D1C21) | [141](#sD10D9E9D3EB05AA5A2A84AE8A59D1C21) |

The following table lists each of our material facilities and its location, use and approximate square footage, at December 31, [removed: 2018.][added: 2019.]

| [removed: Facility] [added: Facility] | [removed: Use] [added: Use] | [removed: Approximate size] [added: Approximate size] | |

| [removed: Norcross,] [added: Atlanta,] Georgia | Corporate headquarters and operations | [removed: 100,000] [added: 46,500] | |

| Houston, Texas | Credit and collections | [removed: 6,300] [added: 7,400] | |

| [removed: International] [added: International Segment] | | | |

| Mexico City, Mexico(1) | [removed: FLEETCOR] Mexico headquarters and operations | 29,200 | |

| Moscow, Russia | PPR and NKT headquarters, sales, customer support, operations, credit and collections | [removed: 15,800] [added: 5,700] | |

| [removed: Knaresborough,] [added: Walsall,] United Kingdom | [added: CHJ] Operations, sales and customer support | [removed: 5,100] [added: 9,500] | |

| London, United Kingdom | Europe headquarters [removed: (including Cambridge Europe)] | [removed: 7,500] [added: 15,000] | |

| Swindon, United Kingdom | Allstar [added: and TFC] operations, sales and customer [removed: support] [added: support, human resources and finance] | 18,300 | |

| [removed: Walsall,] [added: Meriden,] United Kingdom | [removed: Operations, sales] [added: EPYX headquarters, sales, operations] and customer support | [removed: 9,500] [added: 16,500] | |

| [removed: Birmingham, United Kingdom] [added: Bloomington, Minnesota] | [removed: EPYX headquarters,] [added: Travelliance] sales, operations and customer support | [removed: 16,300] [added: 13,300] | |

| Sao Paulo, Brazil | [removed: CTF and] [added: STP, CTF,] VB Servicios [added: and DB] headquarters, sales, [added: operations and] customer support [removed: and operations] | [removed: 32,300] [added: 100,300] | |

| Osasco, Brazil | CTF and VB Servicios [removed: operations,] [added: operations and] STP [added: collections] and [removed: SemParar Headquarters, sales,] operations [removed: and customer support] | [removed: 59,900] [added: 21,600] | |

Additionally, we lease a number of minor additional [removed: facilities,] [added: facilities not listed above,] including local sales and operations offices less than [removed: 3,250] [added: 5,000] square feet, small storage facilities and a small number of service stations in the United [removed: Kingdom; which are not included in the above list.][added: Kingdom.]

[added: We believe our facilities are] adequate for our needs for at least the next 12 months.

| North America Segment | | Square Feet | |

| Peachtree Corners, Georgia | Operations | 57,000 | |

| Beaverton, Oregon | NvoicePay sales, operations and customer support | 32,600 | |

| Schaumburg, Illinois | Travelliance sales, operations and customer support | 17,000 | |

| Portland, Oregon | SOLE Financial sales, operations and customer support | 11,100 | |

| Melbourne, Australia | Business Fuel Cards sales | 6,200 | |

| Sheffield, United Kingdom | r2c operations | 5,900 | |

| Knaresborough, United Kingdom | Allstar and TFC sales | 5,100 | |

| United States | | Square Feet | |

| Concord, California | Customer support | 7,100 | |

| Bala Cynwyd, Pennsylvania | Cambridge global exchange division | 4,800 | |

| Bryansk, Russia | Sales and marketing | 19,000 | |

| Rostov-on-Don, Russia | Gazprom headquarters and operations | 9,600 | |

We believe our facilities are

[removed: PART II][added: PART II]

[removed: MATTERS,] [added: MATTERS,] AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES][added: SECURITIES]

Our common stock is traded on the New York Stock Exchange (NYSE) under the symbol “FLT.” As of December 31, [removed: 2018,] [added: 2019,] there were [removed: 148] [added: 257] holders of record of our common stock.

The timing and amount of stock repurchases, if any, will depend on a variety of factors including the stock price, market conditions, corporate and regulatory requirements, and any additional constraints related to material inside information [removed: the Company] [added: we] may possess.

On [removed: August 3, 2017,] [added: December 14, 2018,] as part of the Program, we entered an [removed: Accelerated Share Repurchase] [added: accelerated share repurchase] ("ASR") agreement [removed: ("2017] [added: ("2018] ASR Agreement") with a third-party financial institution to repurchase [removed: $250] [added: $220] million of our common stock.

Pursuant to the [removed: 2017] [added: 2019] ASR Agreement, we delivered [removed: $250] [added: $500] million in cash and received [removed: 1,491,647] [added: 1,431,989] shares based on a stock price of [removed: $142.46] [added: $285.70] on [removed: August 7, 2017.][added: December 18, 2019.]

The [removed: 2017] [added: 2019] ASR Agreement was completed [removed: on September 7, 2017,] [added: February 20, 2020,] at which time we received [removed: 263,012] [added: 175,340] additional shares based on a final weighted average per share purchase price during the repurchase period of [removed: $142.48.][added: $306.81.]

On December [removed: 14, 2018, as part of the Program,] [added: 18, 2019,] we entered [removed: an] [added: into another] ASR agreement [removed: ("2018] [added: ("2019] ASR Agreement") with a third-party financial institution to repurchase [removed: $220] [added: $500] million of [removed: our] [added: its] common stock.

We accounted for the [removed: 2017 and] 2018 ASR [removed: Agreements] [added: Agreement and the 2019 ASR Agreement] as two separate transactions: (i) as shares of reacquired common stock for the shares delivered to [removed: us] [added: the Company] upon effectiveness of each ASR agreement and (ii) as a forward contract indexed to the [removed: our] [added: Company's] common stock for the undelivered shares.

The forward contracts indexed to [removed: the Company's] [added: our] own common stock met the criteria for equity classification, and these amounts were initially recorded in additional paid-in capital.

There were [removed: 4,911,438] [added: 2,094,115] common shares totaling [removed: $958.7 million, 2,854,959] [added: $603.8 million in 2019; 4,911,438] common shares totaling [removed: $402.4] [added: $958.7] million [added: in 2018,] and [removed: 1,259,145] [added: 2,854,959] common shares totaling [removed: $187.7] [added: $402.4] million [added: in 2017;] repurchased under the [removed: Program during 2018, 2017 and 2016, respectively.][added: Program.]

The following table presents information with respect to purchase of common stock of the Company made during the three months ended December 31, [removed: 2018] [added: 2019] by the Company as defined in Rule 10b-18(a)(3) under the Exchange Act:

| [removed: Period] [added: Period] | | [removed: Total] [added: Total] Number of Shares [removed: Purchased] [added: Purchased] | | | [removed: Average] [added: Average] Price Paid Per [removed: Share] [added: Share] | | | | [removed: Total] [added: Total] Number of Shares Purchased as Part of the Publicly Announced [removed: Plan] [added: Plan] | | | [removed: Maximum] [added: Maximum] Value that May Yet be Purchased Under the Publicly Announced Plan (in [removed: thousands)] [added: thousands)] | | |

The following graph assumes $100 invested on December 31, [removed: 2013,] [added: 2014,] at the closing price [removed: ($117.17)] [added: ($148.71)] of our common stock on that day, and compares (a) the percentage change of our cumulative total stockholder return on the common stock (as measured by dividing (i) the difference between our share price at the end and the beginning of the period presented by (ii) the share price at the beginning of the periods presented) with (b) (i) the Russell 2000 Index, (ii) the S&P 500® Data Processing & Outsourced Services and (iii) S&P 500.

[removed: ][added: ]

Our Board of Directors has approved a stock repurchase program (as updated from time to time, the "Program"), authorizing the Company to repurchase its common stock from time to time until February 1, 2023.

On October 22, 2019, our Board increased the aggregate size of the Program by $1 billion, to $3.1 billion.

Since the beginning of the Program, 11,119,657 shares have been repurchased for an aggregate purchase price of $2.2 billion, leaving us up to $857 million available under the Program for future repurchases of our common stock, taking into account the full $500 million committed with the 2019 ASR Agreement (defined below), which completed on February 20, 2020.

| October 1, 2019 through October 31, 2019 | | 49 | | | $ | 297.49 | | | 9,238,809 | | | $ | 1,489,074 | |

| November 1, 2019 through November 30, 2019 | | 149,848 | | | $ | 293.43 | | | 9,388,657 | | | $ | 1,445,105 | |

| December 1, 2019 through December 31, 2019 | | 1,731,000 | | | $ | 287.51 | | | 11,119,657 | | | $ | 947,420 | |

On February 4, 2016, our Board of Directors approved a stock repurchase program (the "Program") under which we may purchase up to an aggregate of $500 million of our common stock over the following 18 months period.

On July 27, 2017, our Board of Directors authorized an increase in the size of the Program by an additional $250 million and an extension of the Program by an additional 18 months.

On November 1, 2017, we announced that our Board of Directors had authorized an increase in the size of the Program by an additional $350 million and on July 17, 2018, our Board of Directors authorized an additional increase of $500 million in the size of the Program.

On January 23, 2019, our Board of Directors authorized an increase in the size of the program by an additional $500 million, resulting in total aggregate repurchases authorized under the Program of $2.1 billion.

With the increase and giving effect to our $1.5 billion of previous repurchases, we may repurchase up to $551 million in shares of our common stock at any time prior to February 1, 2020.

Since the beginning of the Program, 9,025,542 shares for an aggregate purchase price of $1.5 billion have been repurchased.

| November 1, 2018 through November 30, 2018 | | 1,519,954 | | | $ | 195.96 | | | 7,530,164 | | | $ | 311,436 | |

| December 1, 2018 through December 31, 2018 | | 1,495,378 | | | $ | 187.38 | | | 9,025,542 | | | $ | 51,233 | |

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | |

| Period Ending | | FLEETCOR Technologies, Inc. | | | | Russell 2000 | | | | S&P Data Processing and Outsourced Services | | | S&P 500 | | |

| 12/31/2013 | | $ | 100.00 | | | $ | 100.00 | | | $ | 100.00 | | $ | 100.00 | |

| 3/31/2014 | | $ | 98.23 | | | $ | 100.81 | | | $ | 95.19 | | $ | 101.30 | |

| 6/30/2014 | | $ | 112.49 | | | $ | 102.52 | | | $ | 95.45 | | $ | 106.05 | |

| 9/30/2014 | | $ | 121.29 | | | $ | 94.67 | | | $ | 96.68 | | $ | 106.70 | |

| 12/31/2014 | | $ | 126.92 | | | $ | 103.53 | | | $ | 112.14 | | $ | 111.39 | |

| 3/31/2015 | | $ | 128.80 | | | $ | 107.66 | | | $ | 114.63 | | $ | 111.88 | |

| 6/30/2015 | | $ | 133.19 | | | $ | 107.76 | | | $ | 115.79 | | $ | 111.62 | |

| 9/30/2015 | | $ | 117.45 | | | $ | 94.59 | | | $ | 113.99 | | $ | 103.88 | |

| 12/31/2015 | | $ | 121.99 | | | $ | 97.62 | | | $ | 123.96 | | $ | 110.58 | |

| 3/30/2016 | | $ | 126.95 | | | $ | 95.74 | | | $ | 124.26 | | $ | 111.44 | |

| 6/30/2016 | | $ | 122.16 | | | $ | 98.99 | | | $ | 121.90 | | $ | 113.55 | |

| 9/30/2016 | | $ | 148.27 | | | $ | 107.56 | | | $ | 131.57 | | $ | 117.31 | |

| 12/31/2016 | | $ | 120.78 | | | $ | 116.63 | | | $ | 131.22 | | $ | 121.13 | |

| 3/31/2017 | | $ | 129.24 | | | $ | 119.10 | | | $ | 142.77 | | $ | 127.83 | |

| 6/30/2017 | | $ | 123.08 | | | $ | 121.63 | | | $ | 153.01 | | $ | 131.11 | |

| 9/30/2017 | | $ | 132.09 | | | $ | 128.12 | | | $ | 170.75 | | $ | 136.30 | |

| 12/31/2017 | | $ | 164.23 | | | $ | 131.96 | | | $ | 185.09 | | $ | 144.65 | |

| 3/31/2018 | | $ | 172.83 | | | $ | 131.43 | | | $ | 195.76 | | $ | 142.88 | |

| 6/30/2018 | | $ | 179.78 | | | $ | 141.20 | | | $ | 216.38 | | $ | 147.07 | |

| 9/30/2018 | | $ | 194.45 | | | $ | 145.80 | | | $ | 240.24 | | $ | 157.65 | |

| 12/31/2018 | | $ | 158.50 | | | $ | 115.89 | | | $ | 209.69 | | $ | 135.63 | |

We derived the consolidated statement of income and other financial data for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] and the selected consolidated balance sheet data as of December 31, [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] from the audited consolidated financial statements included elsewhere in this report.

We derived the selected historical financial data for the years ended December 31, [removed: 2015] [added: 2016] and [removed: 2014] [added: 2015] and the selected consolidated balance sheets as of December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] from our audited consolidated financial statements that are not included in this report.

| [removed: (in] [added: (in] thousands, except per share [removed: data)] [added: data)] | | [removed: 2018¹] [added: 20191] | | | | [removed: 2017] [added: 20182] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| [removed: Consolidated] [added: Consolidated] statement of income [removed: data:] [added: data:] | | | | | | | | | | | | | | | | | | | | |

| Revenues, net | | $ | [removed: 2,433,492] [added: 2,648,848] | | | $ | [removed: 2,249,538] [added: 2,433,492] | | | $ | [removed: 1,831,546] [added: 2,249,538] | | | $ | [removed: 1,702,865] [added: 1,831,546] | | | $ | [removed: 1,199,390] [added: 1,702,865] | |

| Merchant commissions | | — | | | | [removed: 113,133] [added: —] | | | | [removed: 104,345] [added: 113,133] | | | | [removed: 108,257] [added: 104,345] | | | | [removed: 96,254] [added: 108,257] | | |

| Processing | | [removed: 487,695] [added: 530,669] | | | | [removed: 429,613] [added: 487,695] | | | | [removed: 355,414] [added: 429,613] | | | | [removed: 331,073] [added: 355,414] | | | | [removed: 173,337] [added: 331,073] | | |

| Selling | | [removed: 182,593] [added: 204,806] | | | | [removed: 170,717] [added: 182,593] | | | | [removed: 131,443] [added: 170,717] | | | | [removed: 109,075] [added: 131,443] | | | | [removed: 75,527] [added: 109,075] | | |

| General and administrative | | [removed: 389,172] [added: 407,210] | | | | [removed: 387,694] [added: 389,172] | | | | [removed: 283,625] [added: 387,694] | | | | [removed: 297,715] [added: 283,625] | | | | [removed: 205,963] [added: 297,715] | | |

| Depreciation and amortization | | [removed: 274,609] [added: 274,210] | | | | [removed: 264,560] [added: 274,609] | | | | [removed: 203,256] [added: 264,560] | | | | [removed: 193,453] [added: 203,256] | | | | [removed: 112,361] [added: 193,453] | | |

| Other operating expense (income), net | | [removed: 8,725] [added: 523] | | | | [removed: 61] [added: 8,725] | | | | [removed: (690] [added: 61] | | [removed: )] | | [removed: (4,242] [added: (690] | | ) | | [removed: (29,501] [added: (4,242] | | ) |

| Operating income | | [removed: 1,090,698] [added: 1,231,430] | | | | [removed: 883,760] [added: 1,090,698] | | | | [removed: 754,153] [added: 883,760] | | | | [removed: 667,534] [added: 754,153] | | | | [removed: 565,449] [added: 667,534] | | |

| Investment [removed: loss] [added: loss, net] | | [removed: 7,147] [added: 3,470] | | | | [removed: 53,164] [added: 7,147] | | | | [removed: 36,356] [added: 53,164] | | | | [removed: 57,668] [added: 36,356] | | | | [removed: 8,586] [added: 57,668] | | |

| Other [removed: (income) expense,] [added: expense (income),] net | | [added: 93 | | | |] (152,166 | | ) | | (173,436 | | ) | | 2,982 | | | | 2,523 | | | [removed: | (700 | | ) |]

| Interest expense, net | | [removed: 138,494] [added: 150,048] | | | | [removed: 107,146] [added: 138,494] | | | | [removed: 71,896] [added: 107,146] | | | | [removed: 71,339] [added: 71,896] | | | | [removed: 28,856] [added: 71,339] | | |

| Loss on extinguishment of debt | | [removed: 2,098] [added: —] | | | | [removed: 3,296] [added: 2,098] | | | | [removed: —] [added: 3,296] | | | | — | | | | [removed: 15,764] [added: —] | | |

| Total other [removed: (income)] expense [added: (income)] | | [added: 153,611 | | | |] (4,427 | | ) | | (9,830 | | ) | | 111,234 | | | | 131,530 | | | [removed: | 52,506 | | |]

| Income before income taxes | | [removed: 1,095,125] [added: 1,077,819] | | | | [removed: 893,590] [added: 1,095,125] | | | | [removed: 642,919] [added: 893,590] | | | | [removed: 536,004] [added: 642,919] | | | | [removed: 512,943] [added: 536,004] | | |

| Provision for income taxes | | [removed: 283,642] [added: 182,746] | | | | [removed: 153,390] [added: 283,642] | | | | [removed: 190,534] [added: 153,390] | | | | [removed: 173,573] [added: 190,534] | | | | [removed: 144,236] [added: 173,573] | | |

| Net income | | $ | [removed: 811,483] [added: 895,073] | | | $ | [removed: 740,200] [added: 811,483] | | | $ | [removed: 452,385] [added: 740,200] | | | $ | [removed: 362,431] [added: 452,385] | | | $ | [removed: 368,707] [added: 362,431] | |

| Basic earnings per share | | $ | [removed: 9.14] [added: 10.36] | | | $ | [removed: 8.12] [added: 9.14] | | | $ | [removed: 4.89] [added: 8.12] | | | $ | [removed: 3.94] [added: 4.89] | | | $ | [removed: 4.37] [added: 3.94] | |

| Diluted earnings per share | | $ | [removed: 8.81] [added: 9.94] | | | $ | [removed: 7.91] [added: 8.81] | | | $ | [removed: 4.75] [added: 7.91] | | | $ | [removed: 3.85] [added: 4.75] | | | $ | [removed: 4.24] [added: 3.85] | |

| Basic shares | | [removed: 88,750] [added: 86,401] | | | | [removed: 91,129] [added: 88,750] | | | | [removed: 92,597] [added: 91,129] | | | | [removed: 92,023] [added: 92,597] | | | | [removed: 84,317] [added: 92,023] | | |

| Diluted shares | | [removed: 92,151] [added: 90,070] | | | | [removed: 93,594] [added: 92,151] | | | | [removed: 95,213] [added: 93,594] | | | | [removed: 94,139] [added: 95,213] | | | | [removed: 86,982] [added: 94,139] | | |

| | | [removed: As] [added: As] of December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| [removed: (in thousands)] [added: (in thousands)] | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| [removed: Consolidated] [added: Consolidated] balance sheet [removed: data:] [added: data:] | | | | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | | $ | [removed: 1,031,145] [added: 1,271,494] | | | $ | [removed: 913,595] [added: 1,031,145] | | | $ | [removed: 475,018] [added: 913,595] | | | $ | [removed: 447,152] [added: 475,018] | | | $ | [removed: 477,069] [added: 447,152] | |

| Restricted [removed: cash2] [added: cash3] | | [removed: 333,748] [added: 403,743] | | | | [removed: 217,275] [added: 333,748] | | | | [removed: 168,752] [added: 217,275] | | | | [removed: 167,492] [added: 168,752] | | | | [removed: 135,144] [added: 167,492] | | |

| Total assets | | [removed: 11,202,477] [added: 12,248,541] | | | | [removed: 11,318,359] [added: 11,202,477] | | | | [removed: 9,626,732] [added: 11,318,359] | | | | [removed: 7,889,806] [added: 9,626,732] | | | | [removed: 8,524,701] [added: 7,889,806] | | |

| Total debt | | [removed: 4,819,047] [added: 5,036,785] | | | | [removed: 4,518,616] [added: 4,819,047] | | | | [removed: 3,858,233] [added: 4,518,616] | | | | [removed: 2,935,000] [added: 3,858,233] | | | | [removed: 3,593,717] [added: 2,935,000] | | |

| Total stockholders’ equity | | [removed: 3,340,180] [added: 3,711,616] | | | | [removed: 3,676,522] [added: 3,340,180] | | | | [removed: 3,084,038] [added: 3,676,522] | | | | [removed: 2,830,047] [added: 3,084,038] | | | | [removed: 2,618,562] [added: 2,830,047] | | |

| [removed: 1] [added: 2] Reflects the impact of the Company's adoption of Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606") and related cost capitalization guidance, which was adopted by the Company on January 1, 2018 using the modified retrospective transition method. The adoption of ASC 606 resulted in an adjustment to retained earnings in our consolidated balance sheet for the cumulative effect of applying the standard, which included costs incurred to obtain a contract, as well as presentation changes in our statements of income, including the classification of certain amounts previously classified as merchant commissions and processing expense net with revenues. As a result of the application of the modified retrospective transition method, the Company's prior period results within its Form 10-K and quarterly reports on Form 10-Q will not be restated to reflect ASC 606. |

| [removed: 2] [added: 3] Restricted cash represents customer deposits repayable, as well as collateral received from customers for cross-currency transactions. |

| 1Reflects the impact of the Company's adoption of ASU 2016-02 "Leases", on January 1, 2019, using a modified retrospective transition method. Under this method, financial results reported in periods prior to 2019 are unchanged. |

[removed: INDEX] [added: INDEX] TO CONSOLIDATED FINANCIAL [removed: STATEMENTS][added: STATEMENTS]

| | [removed: Page] [added: Page] |

[removed: | [Report] [added: Report] of Independent Registered Public Accounting [removed: Firm](#s3F1708CA29845F6ABDBF4D009617E965) | [91](#s3F1708CA29845F6ABDBF4D009617E965) |][added: Firm]

| [Consolidated Balance Sheets at December 31, [removed: 2018] [added: 2019] and [removed: 2017](#s7F90E06CC1FC581199A74DBDEE82F356)] [added: 2018](#s3C880892AEC4541D9C61CE456681E8D0)] | [removed: [92](#s7F90E06CC1FC581199A74DBDEE82F356)] [added: [81](#s3C880892AEC4541D9C61CE456681E8D0)] |

| [Consolidated Statements of Income for the Years Ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#sF9BF22020F1E5F6EB3CD794DBF5F9E10)] [added: 2017](#s08C121B749BD504BB2B4E8F0701B1F6D)] | [removed: [94](#sF9BF22020F1E5F6EB3CD794DBF5F9E10)] [added: [82](#s08C121B749BD504BB2B4E8F0701B1F6D)] |