The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the unaudited consolidated
financial statements and related notes appearing elsewhere in this report. In
addition to historical information, this discussion contains forward-looking
statements that involve risks, uncertainties and assumptions that could cause
actual results to differ materially from management's expectations. Factors that
could cause such differences include, but are not limited to, those identified
below and those described in Item 1A "Risk Factors" appearing in our Annual
Report on Form 10-K for the year ended December 31, 2020. All foreign currency
amounts that have been converted into U.S. dollars in this discussion are based
on the exchange rate as reported by Oanda for the applicable periods.

The following discussion and analysis of our financial condition and results of
operations generally discusses the third quarter and the first nine months of
2021 and 2020, with period-over-period comparisons between these periods. A
detailed discussion of 2020 items and period-over-period comparisons between the
third quarter and first nine months of 2020 and 2019 that are not included in
this Quarterly Report on Form 10-Q can be found in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in Part I, Item 2 of
our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.

Executive Overview
FLEETCOR is a leading global provider of digital payment solutions that enables
businesses to control purchases and make payments more effectively and
efficiently. Since its incorporation in 2000, FLEETCOR has continued to deliver
on its mission: to provide businesses with "a better way to pay". FLEETCOR has
been a member of the S&P 500 since 2018 and trades on the New York Stock
Exchange under the ticker FLT.
As previously described in our Annual Report on Form 10-K for the year ended
December 31, 2020, businesses spend an estimated $170 trillion each year. In
many instances, they lack the proper tools to monitor what is being purchased,
and employ manual, paper-based, disparate processes and methods to both approve
and make payments for their purchases. This often results in wasted time and
money due to unnecessary or unauthorized spending, fraud, receipt collection,
data input and consolidation, report generation, reimbursement processing,
account reconciliations, employee disciplinary actions, and more.
FLEETCOR's vision is that every payment is digital, every purchase is
controlled, and every related decision is informed. Digital payments are faster
and more secure than paper-based methods such as checks, and provide timely and
detailed data which can be utilized to effectively reduce unauthorized purchases
and fraud, automate data entry and reporting, and eliminate reimbursement
processes. Combining this payment data with analytical tools delivers powerful
insights, which managers can use to better run their businesses. Our wide range
of modern, digitized solutions generally provides control, reporting, and
automation benefits superior to many of the payment methods businesses often
used, such as cash, paper checks, general purpose credit cards, as well as
employee pay and reclaim processes.
Our revenue is generally reported net of the cost for underlying products and
services purchased through our payment solutions. In this report, we refer to
this net revenue as "revenue". See "Results of Operations" for additional
segment information.

Impact of COVID-19 on Our Business
On March 11, 2020, the World Health Organization declared the novel strain of
coronavirus (including variants thereof, "COVID-19") a global pandemic and
recommended containment and mitigation measures worldwide. The COVID-19 pandemic
has had, and could continue to have, an adverse impact on our results of
operations and liquidity; the operations of our suppliers, vendors and
customers; and on our employees as a result of quarantines, vaccine mandates,
facility closures, travel and logistics restrictions and general decreases in
the level of consumer confidence and business activity.
The COVID-19 pandemic continues to impact various aspects of the world economy
and our customers. The extent to which the COVID-19 pandemic continues to impact
our business operations, financial results, and liquidity through the remainder
of 2021 and into 2022 will depend on numerous evolving factors that we may not
be able to accurately predict or assess, including the duration and scope of the
pandemic and the geographies most affected; vaccine availability globally,
distribution, efficacy to new strains of the virus and the public's willingness
to get vaccinated, including potential disruptions impacting our suppliers and
vendors resulting, directly or indirectly, from vaccine mandates and/or vaccine
hesitancy; our response to the continued impact of the pandemic; the negative
impact it has on global and regional economies and general economic activity,
including the duration and magnitude of its impact on unemployment rates and
business spending levels; its short- and longer-term impact on the levels of
consumer confidence; the ability of our suppliers, vendors and customers to
successfully address the continued impacts of the pandemic; and actions
governments, businesses and individuals take in response to the pandemic; and
how quickly economies recover after the pandemic subsides.
Performance
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 three and
nine months ended September 30, 2021 and 2020 (in millions, except per share
amounts).
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                                                      Three Months Ended September 30,            Nine Months Ended September 30,
(Unaudited)                                               2021                   2020                2021                2020
Revenues, net                                     $           755.5          $    585.3          $  2,031.5          $  1,771.5
Net income                                        $           234.0        

$ 188.8 $ 614.5 $ 494.4 Net income per diluted share

                      $            2.80         

$ 2.19 $ 7.24 $ 5.68





Adjusted Net Income and Adjusted Net Income Per Diluted Share. Set forth below
are adjusted net income and adjusted net income per diluted share for the three
and nine months ended September 30, 2021 and 2020 (in millions, except per share
amounts).

                                               Three Months Ended September 30,               Nine Months Ended September 30,
(Unaudited)                                        2021                   2020                    2021                   2020
Adjusted net income                        $           294.4          $    241.9          $           804.9          $    703.9
Adjusted net income per diluted
share                                      $            3.52          $     2.80          $            9.48          $     8.09


Adjusted net income and adjusted net income per diluted share are supplemental
non-GAAP financial measures of operating performance. See the heading entitled
"Management's Use of Non-GAAP Financial Measures" for more information and a
reconciliation of the non-GAAP financial measure to the most directly comparable
financial measure calculated in accordance with GAAP. We use adjusted net income
and adjusted net income per diluted share to eliminate the effect of items that
we do not consider indicative of our core operating performance on a consistent
basis.
Sources of Revenue
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 88% of our
revenues generated in the U.S., Brazil, and the U.K. Our customers may include
commercial businesses (obtained through direct and indirect channels), partners
for whom we manage payment programs, as well as individual consumers.
FLEETCOR has three reportable segments, North America, International, and
Brazil. We report these three segments as they reflect how we organize and
manage our global employee base, manage operating performance, contemplate the
differing regulatory environments across geographies, and help us isolate the
impact of foreign exchange fluctuations on our financial results. However, to
help facilitate an understanding of our expansive range of solutions around the
world, we describe them in two categories: Corporate Payments solutions, which
simplify and automate payments, and Expense Management solutions, which help
control and monitor employee spending.
Our Corporate Payments solutions are designed to help businesses streamline the
back-office operations associated with making outgoing payments. Companies save
time, cut costs, and manage B2B payment processing more efficiently with our
suite of corporate payment solutions, including accounts payable (AP)
automation, virtual cards, cross-border, and purchasing and T&E cards. Our
Expense Management solutions (Fuel, Tolls, and Lodging) are purpose-built to
provide customers with greater control and visibility of employee spending when
compared with less specialized payment methods, such as cash or general-purpose
credit cards. FLEETCOR provides several other payments solutions that, due to
their nature or size, are not considered within our Corporate Payments and
Expense Management solutions.

Revenues, net, by Segment. For the three and nine months ended September 30, 2021 and 2020, our segments generated the following revenue (in millions).


                                                                     Three Months Ended September 30,                                                                       Nine Months Ended September 30,
                                                          2021                                               2020                                               2021                                                2020
                                                                   % of Total                                         % of Total                                          % of Total                                         % of Total
(Unaudited)*                            Revenues, net            Revenues, net             Revenues, net            Revenues, net             Revenues, net             Revenues, net             Revenues, net            Revenues, net
North America                         $        520.5                       68.9  %       $        383.8                       65.6  %       $       1,366.2                       67.2  %       $      1,176.0                       66.4  %
Brazil                                          94.9                       12.6  %                 79.6                       13.6  %                 262.5                       12.9  %                253.7                       14.3  %
International                                  140.1                       18.5  %                121.9                       20.8  %                 402.8                       19.8  %                341.9                       19.3  %
                                      $        755.5                        100  %       $        585.3                        100  %       $       2,031.5                        100  %       $      1,771.5                        100  %

*Columns may not calculate due to rounding.


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Revenues, net by Geography and Solution. Revenue by geography and solution for
the three and nine months ended September 30, 2021 and 2020 (in millions), was
as follows:
                                                                    Three Months Ended September 30,                                                                       Nine Months Ended September 30,
Revenues, net by Geography*                              2021                                               2020                                               2021                                                2020
                                                                  % of Total                                         % of Total                                          % of Total                                         % of Total
(Unaudited)                            Revenues, net            Revenues, net             Revenues, net            Revenues, net             Revenues, net             Revenues, net             Revenues, net            Revenues, net
United States                        $        488.2                         65  %       $        357.1                         61  %       $       1,271.5                         63  %       $      1,089.9                         62  %
Brazil                                         94.9                         13  %                 79.6                         14  %                 262.5                         13  %                253.7                         14  %
United Kingdom                                 81.9                         11  %                 70.2                         12  %                 241.0                         12  %                192.8                         11  %
Other                                          90.5                         12  %                 78.3                         13  %                 256.5                         13  %                235.1                         13  %
Consolidated revenues, net           $        755.5                        100  %       $        585.3                        100  %       $       2,031.5                        100  %       $      1,771.5                        100  %

*Columns may not calculate due to rounding.


                                                                        Three Months Ended September 30,                                                                         Nine Months Ended September 30,
Revenues, net by Solution*                                  2021                                                2020                                                 2021                                                2020
                                                                     % of Total                                          % of Total                                           % of Total                                          % of Total
(Unaudited)                               Revenues, net             Revenues, net             Revenues, net             Revenues, net             Revenues, net              Revenues, net             Revenues, net             Revenues, net
Fuel                                    $        306.8                          41  %       $        255.1                          44  %       $         863.8                          43  %       $        797.0                          45  %
Corporate Payments                               168.7                          22  %                106.5                          18  %                 425.5                          21  %                319.0                          18  %
Tolls                                             79.0                          10  %                 67.6                          12  %                 219.4                          11  %                215.4                          12  %
Lodging                                           85.2                          11  %                 52.9                           9  %                 206.5                          10  %                150.5                           8  %
Gift                                              48.6                           6  %                 39.1                           7  %                 124.3                           6  %                108.0                           6  %
Other                                             67.2                           9  %                 64.1                          11  %                 192.1                           9  %                181.6                          10  %
Consolidated revenues, net              $        755.6                         100  %       $        585.3                         100  %       $       2,031.5                         100  %       $      1,771.5                         100  %

*Columns may not calculate due to rounding.


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The following table presents revenue per key performance metric by solution for
the three months ended September 30, 2021 and 2020 (in millions except revenues,
net per key performance metric).*
                                                              As Reported                                                            Pro Forma and Macro Adjusted2
                                                    Three Months Ended September 30,                                                Three Months Ended September 30,
(Unaudited)                         2021                  2020             Change             % Change                2021                2020             Change            % Change
FUEL
'- Revenues, net               $    306.8              $  255.1          $   51.6                   20  %       $      288.7           $  255.6          $  33.1                   13  %
'- Transactions                     117.7                 113.6               4.1                    4  %              117.7              113.9              3.8                    3  %
'- Revenues, net per
transaction                    $     2.61              $   2.25          $   0.36                   16  %       $       2.45           $   2.24          $  0.21                    9  %
CORPORATE PAYMENTS
'- Revenues, net               $    168.7              $  106.5          $   62.2                   58  %       $      165.6           $  135.9          $  29.7                   22  %
'- Spend volume                $   25,666              $ 15,567          $ 10,099                   65  %       $     25,666           $ 19,617          $ 6,050                   31  %
'- Revenue, net per spend $          0.66   %              0.68  %          (0.03) %                (4) %               0.65   %           0.69  %         (0.05) %                (7) %
TOLLS
'- Revenues, net               $     79.0              $   67.6          $   11.4                   17  %       $       76.9           $   67.6          $   9.2                   14  %
'- Tags (average monthly)             6.0                   5.4               0.6                   11  %                6.0                5.4              0.6                   11  %
'- Revenues, net per tag       $    13.25              $  12.60          $   0.65                    5  %       $      12.89           $  12.60          $  0.29                    2  %
LODGING
'- Revenues, net               $     85.2              $   52.9          $   32.4                   61  %       $       85.2           $   60.7          $  24.5                   40  %
'- Room nights                        7.6                   5.4               2.2                   41  %                7.6                6.1              1.5                   25  %
'- Revenues, net per room
night                          $    11.14              $   9.77          $   1.37                   14  %       $      11.14           $   9.96          $  1.18                   12  %
GIFT
'- Revenues, net               $     48.6              $   39.1          $    9.6                   25  %       $       48.6           $   39.1          $   9.6                   25  %
'- Transactions                     256.2                 242.7              13.4                    6  %              256.2              242.7             13.4                    6  %
'- Revenues, net per
transaction                    $     0.19              $   0.16          $   0.03                   18  %       $       0.19           $   0.16          $  0.03                   18  %
OTHER1
'- Revenues, net               $     67.2              $   64.1          $    3.1                    5  %       $       65.4           $   64.1          $   1.3                    2  %
'- Transactions                       8.9                   9.9              (1.0)                 (10) %                8.9                9.9             (1.0)                 (10) %
'- Revenues, net per
transaction                    $     7.58              $   6.48          $   1.10                   17  %       $       7.39           $   6.48          $  0.91                   14  %
FLEETCOR CONSOLIDATED
REVENUES, NET
'- Revenues, net               $    755.5              $  585.3          $  170.2                   29  %       $      730.3           $  623.0          $ 107.3                   17  %


1 Other includes telematics, maintenance, food, transportation and payroll card related
businesses.
2 See heading entitled "Managements' Use of Non-GAAP Financial Measures" for a reconciliation
of pro forma and macro adjusted revenue by solution and metric non-GAAP measures to the
comparable financial measure calculated in accordance with GAAP.
* Columns may not calculate due to rounding.


Revenue per relevant key performance indicator ("KPI"), which may include
transaction, spend volume, monthly tags, room nights, or other metrics, is
derived from the various revenue types as discussed above and can vary based on
geography, the relevant merchant relationship, the payment solution utilized and
the types of products or services purchased, the mix of which would be
influenced by our acquisitions, organic growth in our business, and the overall
macroeconomic environment, including fluctuations in foreign currency exchange
rates, fuel prices, and fuel price spreads. Revenue per KPI per customer may
change as the level of services we provide to a customer increases or decreases,
as macroeconomic factors change and as adjustments are made to merchant and
customer rates. See "Results of Operations" for further discussion of
transaction volumes and revenue per transaction.
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Sources of Expenses
We incur expenses in the following categories:
•Processing-Our processing expenses consist of expenses related to processing
transactions, servicing our customers and merchants, credit losses and cost of
goods sold related to our hardware sales in certain businesses.
•Selling-Our selling expenses consist primarily of wages, benefits, sales
commissions (other than merchant commissions) and related expenses for our
sales, marketing and account management personnel and activities.
•General and administrative-Our general and administrative expenses include
compensation and related expenses (including stock-based compensation) for our
executives, finance and accounting, information technology, human resources,
legal and other administrative personnel. Also included are facilities expenses,
third-party professional services fees, travel and entertainment expenses, and
other corporate-level expenses.
•Depreciation and amortization-Our depreciation expenses include depreciation of
property and equipment, consisting of computer hardware and software (including
proprietary software development amortization expense), card-reading equipment,
furniture, fixtures, vehicles, buildings and leasehold improvements related to
office space. Our amortization expenses include amortization of intangible
assets related to customer and vendor relationships, trade names and trademarks,
software and non-compete agreements. We are amortizing intangible assets related
to business acquisitions and certain private label contracts associated with the
purchase of accounts receivable.
•Other operating, net-Our other operating, net includes other operating expenses
and income items that do not relate to our core operations or that occur
infrequently.
•Investment loss (gain), net-Our investment results primarily relate to
impairment charges related to our investments and unrealized gains and losses
related to a noncontrolling interest in a marketable security, which was
disposed in 2020.
•Other expense (income), net-Our other expense (income), net includes gains or
losses from the sale of assets, foreign currency transactions, and other
miscellaneous operating costs and revenue.
•Interest expense, net-Our interest expense, net includes interest expense on
our outstanding debt, interest income on our cash balances and interest on our
interest rate swaps.
•Provision for income taxes-Our provision for income taxes consists primarily of
corporate income taxes related to earnings resulting from the sale of our
products and services on a global basis.
Factors and Trends Impacting our Business
We believe that the following factors and trends are important in understanding
our financial performance:

•Global economic conditions-Our results of operations are materially affected by
conditions in the economy generally, in North America, Brazil, and
internationally, including the ultimate impact of the COVID-19 pandemic. Factors
affected by the economy include our transaction volumes, the credit risk of our
customers and changes in tax laws across the globe. These factors affected our
businesses in each of our segments.
•Foreign currency changes-Our results of operations are significantly impacted
by changes in foreign currency exchange rates; namely, by movements of the
Australian dollar, Brazilian real, British pound, Canadian dollar, Czech koruna,
euro, Mexican peso, New Zealand dollar and Russian ruble, relative to the U.S.
dollar. Approximately 63% and 62% of our revenue in the nine months ended
September 30, 2021 and 2020, respectively, was derived in U.S. dollars and was
not affected by foreign currency exchange rates. See "Results of Operations" for
information related to foreign currency impacts on our total revenue, net.
Our cross-border foreign currency trading business aggregates foreign exchange
exposures arising from customer contracts and economically hedges the resulting
net currency risks by entering into offsetting contracts with established
financial institution counterparties. These contracts are subject to
counterparty credit risk.
•Fuel prices-Our fleet customers use our products and services primarily in
connection with the purchase of fuel. Accordingly, our revenue is affected by
fuel prices, which are subject to significant volatility. A change in retail
fuel prices could cause a decrease or increase in our revenue from several
sources, including fees paid to us based on a percentage of each customer's
total purchase. Changes in the absolute price of fuel may also impact unpaid
account balances and the late fees and charges based on these amounts. We
believe approximately 12% and 11% of revenues, net were directly impacted by
changes in fuel price in the three months ended September 30, 2021 and 2020,
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respectively. We believe approximately 12% and 10% of revenues, net were
directly impacted by changes in fuel price in the nine months ended September
30, 2021 and 2020, respectively.
•Fuel-price spread volatility-A portion of our revenue involves transactions
where we derive revenue from fuel price spreads, which is the difference between
the price charged to a fleet customer for a transaction and the price paid to
the merchant for the same transaction. In these transactions, the price paid to
the merchant is based on the wholesale cost of fuel. The merchant's wholesale
cost of fuel is dependent on several factors including, among others, the
factors described above affecting fuel prices. The fuel price that we charge to
our customer is dependent on several factors including, among others, the fuel
price paid to the merchant, posted retail fuel prices and competitive fuel
prices. We experience fuel price spread contraction when the merchant's
wholesale cost of fuel increases at a faster rate than the fuel price we charge
to our customers, or the fuel price we charge to our customers decreases at a
faster rate than the merchant's wholesale cost of fuel. The inverse of these
situations produces fuel price spread expansion. We believe approximately 5% and
7% of revenues, net were directly impacted by fuel price spreads in the three
months ended September 30, 2021 and 2020, respectively. We believe approximately
5% and 8% of revenues, net were directly impacted by fuel price spreads in the
nine months ended September 30, 2021 and 2020, respectively.
•Acquisitions-Since 2002, we have completed over 85 acquisitions of companies
and commercial account portfolios. Acquisitions have been an important part of
our growth strategy, and it is our intention to continue to seek opportunities
to increase our customer base and diversify our service offering through further
strategic acquisitions. The impact of acquisitions has, and may continue to
have, a significant impact on our results of operations and may make it
difficult to compare our results between periods.
•Interest rates-Our results of operations are affected by interest rates. We are
exposed to market risk changes in interest rates on our cash investments and
debt. On January 22, 2019, we entered into three swap contracts. The objective
of these swap contracts is to reduce the variability of cash flows in the
previously unhedged interest payments associated with $2.0 billion of variable
rate debt, the sole source of which is due to changes in the LIBOR benchmark
interest rate. For each of these swap contracts, we pay a fixed monthly rate and
receive one month LIBOR.
•Expenses-Over the long term, we expect that our general and administrative
expense will decrease as a percentage of revenue as our revenue increases. To
support our expected revenue growth, we plan to continue to incur additional
sales and marketing expense by investing in our direct marketing, third-party
agents, internet marketing, telemarketing and field sales force.
•Taxes-We pay taxes in various taxing jurisdictions, including the U.S., most
U.S. states and many non-U.S. jurisdictions. The tax rates in certain non-U.S.
taxing jurisdictions are different than the U.S. tax rate. Consequently, as our
earnings fluctuate between taxing jurisdictions, our effective tax rate
fluctuates.

Acquisitions and Investments
2021
•On September 1, 2021, we completed the acquisition of ALE Solutions, Inc.
(ALE), a U.S. based leader in lodging solutions to the insurance industry, for
$426.5 million.
•On June 1, 2021, we completed the acquisition of AFEX, a U.S. based,
cross-border payment solutions provider, for $459.0 million. This includes
$210.3 million of cash and cash equivalents and $178.7 million of restricted
cash, resulting in a net purchase price of $69.9 million.
•On January 13, 2021, we completed the acquisition of Roger, which has been
rebranded as CorpayOne, a global accounts payable (AP) cloud software platform
for small businesses, for $39 million.
•During 2021, we made investments in other businesses of $4.4 million.
2020
•On November 30, 2020, we completed the acquisition of a fuel card provider in
New Zealand for an immaterial amount.
•On August 10, 2020, we completed the acquisition of a business in the lodging
space in the U.S. for an immaterial amount.
Results from our ALE, AFEX, Roger and lodging acquisitions are reported in our
North America segment from the dates of acquisition. Results from our New
Zealand acquisition are reported in our International segment from the date of
acquisition.
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Results of Operations
Three months ended September 30, 2021 compared to the three months ended
September 30, 2020
The following table sets forth selected unaudited consolidated statements of
income and selected operational data for the three months ended September 30,
2021 and 2020 (in millions, except percentages)*.
                                   Three Months Ended             % of Total             Three Months Ended             % of Total               Increase
(Unaudited)                        September 30, 2021            Revenues, net           September 30, 2020            Revenues, net            (decrease)             % Change
Revenues, net:
North America                     $       520.5                            68.9  %       $      383.8                            65.6  %       $    136.7                   35.6  %
Brazil                                     94.9                            12.6  %               79.6                            13.6  %             15.3                   19.2  %
International                             140.1                            18.5  %              121.9                            20.8  %             18.2                   14.9  %
Total revenues, net                       755.5                           100.0  %              585.3                           100.0  %            170.2                   29.1  %
Consolidated operating
expenses:
Processing                                149.6                            19.8  %              119.9                            20.5  %             29.7                   24.8  %
Selling                                    71.2                             9.4  %               46.8                             8.0  %             24.4                   52.3  %
General and administrative                121.8                            16.1  %               90.9                            15.5  %             30.9                   34.0  %
Depreciation and
amortization                               74.2                             9.8  %               63.5                            10.8  %             10.8                   16.9  %
Other operating, net                          -                               -  %               (0.2)                              -  %             (0.2)                       NM
Operating income                          338.7                            44.8  %              264.5                            45.2  %             74.2                   28.0  %
Investment gain                               -                               -  %                1.3                             0.2  %             (1.3)                       NM
Other expense (income), net                 1.5                             0.2  %               (3.6)                           (0.6) %              5.1                 (142.7) %
Interest expense, net                      29.0                             3.8  %               31.4                             5.4  %             (2.4)                  (7.5) %

Provision for income taxes                 74.1                             9.8  %               46.6                             8.0  %             27.5                   59.1  %
Net income                        $       234.0                            31.0  %       $      188.8                            32.3  %       $     45.2                   23.9  %
Operating income for
segments:
North America                     $       213.4                                          $      153.3                                          $     60.1                   39.2  %
Brazil                                     39.9                                                  35.6                                                 4.3                   12.0  %
International                              85.4                                                  75.6                                                 9.8                   13.0  %
Operating income                  $       338.7                                          $      264.5                                          $     74.2                   28.0  %

Operating margin for
segments:
North America                              41.0      %                                           39.9      %                                          1.0  %
Brazil                                     42.0      %                                           44.7      %                                         (2.7) %
International                              61.0      %                                           62.0      %                                         (1.0) %
Consolidated                               44.8      %                                           45.2      %                                         (0.4) %


NM = Not Meaningful
*The sum of the columns and rows may not calculate due to rounding.

Revenues, net
Consolidated revenues were $755.5 million in the three months ended September
30, 2021, an increase of $170.2 million or 29.1%, from $585.3 million in the
three months ended September 30, 2020. Organically, consolidated revenues
increased by approximately 17%. Consolidated revenues and organic growth
increased primarily due to increases in transaction volume as the business
recovered from the effects of the COVID-19 pandemic. The increase was also due
to the impact of acquisitions completed in 2020 and 2021 of approximately $38
million and the positive impact of the macroeconomic environment.
Although we cannot precisely measure the impact of the macroeconomic
environment, in total we believe it had a positive impact on our consolidated
revenues for the three months ended September 30, 2021 over the comparable
period in 2020 of approximately $25 million, driven primarily by the favorable
impact of fuel prices of approximately $17 million and favorable changes in
foreign exchange rates of approximately $12 million, mostly in our U.K., Canada
and Brazil businesses. These increases were partially offset by unfavorable fuel
price spreads of approximately $4 million.

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North America segment revenues, net
North America segment revenues were $520.5 million in the three months ended
September 30, 2021, an increase of $136.7 million or 35.6%, from $383.8 million
in the three months ended September 30, 2020. Organically, North America segment
revenues increased by approximately 20%. North America revenues and organic
growth increased primarily due to increases in transaction volume as the
business recovered from the effects of the COVID-19 pandemic. The increase in
North America revenues was also due to the impact of acquisitions completed in
2020 and 2021 of approximately $37 million and by the positive impact of the
macroeconomic environment.
Although we cannot precisely measure the impact of the macroeconomic
environment, in total we believe it had a positive impact on our North America
segment revenues in the three months ended September 30, 2021 over the
comparable period in 2020 of approximately $14 million, driven primarily by the
favorable impact of fuel prices of approximately $15 million and favorable
changes in foreign exchange rates of approximately $3 million in our
cross-border payments business. These increases were partially offset by
unfavorable fuel price spreads of approximately $4 million.

Brazil segment revenues, net
Brazil segment revenues were $94.9 million in the three months ended September
30, 2021, an increase of $15.3 million or 19.2%, from $79.6 million in three
months ended September 30, 2020. Organically, Brazil segment revenues increased
by approximately 16%. Brazil revenues and organic growth increased primarily due
to increases in toll tags sold as the business recovered from the effects of the
COVID-19 pandemic. The increase in Brazil revenues was also due to the slightly
favorable impact of foreign exchange rates of approximately $3 million for the
three months ended September 30, 2021 over the comparable period in 2020.

International segment revenues, net
International segment revenues were $140.1 million in the three months ended
September 30, 2021, an increase of $18.2 million or 14.9%, from $121.9 million
in the three months ended September 30, 2020. Organically, International segment
revenues increased by approximately 8%. International revenues and organic
growth increased primarily due to continued recovery from the effects of the
COVID-19 pandemic. Although we cannot precisely measure the impact of the
macroeconomic environment, in total we believe it had a positive impact on our
International segment revenues in the three months ended September 30, 2021 over
the comparable period in 2020 of approximately $9 million, driven primarily by
favorable foreign exchange rates of approximately $7 million primarily in our
U.K. business and the favorable impact of fuel prices of approximately $2
million.
Consolidated operating expenses
Processing. Processing expenses were $149.6 million in the three months ended
September 30, 2021, an increase of $29.7 million or 24.8%, from $119.9 million
in the comparable prior period. Increases were primarily due to expenses related
to higher volumes processed of approximately $14 million, expenses related to
acquisitions completed in 2020 and 2021 of approximately $13 million, and the
unfavorable impact of changes in foreign exchange rates of approximately $2
million.
Selling. Selling expenses were $71.2 million in the three months ended September
30, 2021, an increase of $24.4 million or 52.3%, from $46.8 million in the
comparable prior period. Increases in selling expenses were primarily due to
higher commissions and other variable costs due to increased sales volumes in
the third quarter of 2021, expenses related to acquisitions completed in 2020
and 2021 of approximately $11 million and the unfavorable impact of fluctuations
in foreign exchange rates of approximately $1 million.
General and administrative. General and administrative expenses were $121.8
million in the three months ended September 30, 2021, an increase of $30.9
million or 34.0% from $90.9 million in the comparable prior period. Increases in
general and administrative expenses were primarily due to the impact of
acquisitions completed in 2020 and 2021 of approximately $13 million, increased
stock based compensation expense of $4 million, increased professional fees of
$4 million and various other increases associated with growth of business over
comparable period.

Depreciation and amortization. Depreciation and amortization expenses were $74.2
million in the three months ended September 30, 2021, an increase of $10.8
million or 16.9%, from $63.5 million in the comparable prior period. Increases
in depreciation and amortization expenses were primarily due to expenses related
to acquisitions completed in 2020 and 2021 of approximately $9 million and the
unfavorable impact of fluctuations in foreign exchange rates of approximately $1
million.

Investment gain. Investment gain of $1.3 million in the three months ended September 30, 2020 relates to market value gains on our investment in bill.com during the third quarter of 2020, which we sold during the third quarter of 2020.


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Interest expense, net. Interest expense, net was $29.0 million in the three
months ended September 30, 2021, a decrease of $2.4 million or 7.5%, from $31.4
million in the comparable prior period. The decrease in interest expense was
primarily due to higher interest income earned on cash balances and lower LIBOR
rates, partially offset by incremental borrowings on our Credit Facility and
Securitization Facility. The following table sets forth the average interest
rates paid on borrowings under our Credit Facility, excluding the related unused
facility fees and swaps.

                                                                        Three Months Ended September 30,
(Unaudited)                                                             2021                          2020
Term loan A                                                                    1.59  %                      1.66  %
Term loan B                                                                    1.84  %                      1.91  %
Revolving line of credit A, B & C USD Borrowings                               1.59  %                      1.67  %
Revolving line of credit B GBP Borrowings                                      1.52  %                      1.57  %
Foreign swing line                                                             1.54  %                      1.55  %


The average unused facility fee for the Credit Facility was 0.30% in the three
month period ended September 30, 2021.
On January 22, 2019, we entered into three interest rate swap cash flow
contracts. The objective of these interest rate swap contracts is to reduce the
variability of cash flows in the previously unhedged interest payments
associated with $2 billion of variable rate debt, tied to the one month LIBOR
benchmark interest rate. During the three months ended September 30, 2021, as a
result of these swap contracts, we incurred additional interest expense of $12.6
million or 2.46% over the average LIBOR rates on $2 billion of borrowings.
Provision for income taxes. The provision for income taxes and effective tax
rate were $74.1 million and 24.1% in the three months ended September 30, 2021,
an increase of $27.5 million, or a 59.1% change, from $46.6 million and 19.8% in
the three months ended September 30, 2020. We provide for income taxes during
interim periods based on an estimate of our effective tax rate for the year.
Discrete items and changes in the estimate of the annual tax rate are recorded
in the period they occur. The increase in the provision for income taxes was
driven primarily by an increase in pre-tax earnings. The increase in the
effective tax rate was primarily due to lower excess tax benefit on fewer stock
option exercises in 2021 over the comparable period in 2020.
We pay taxes in different taxing jurisdictions, including the U.S., most U.S.
states, and many non-U.S. jurisdictions. The tax rates in certain non-U.S.
taxing jurisdictions are different than the U.S. tax rate. Consequently, as our
earnings fluctuate between taxing jurisdictions, our effective tax rate
fluctuates.
Net income. For the reasons discussed above, our net income increased to $234.0
million in the three months ended September 30, 2021, an increase of $45.2
million, or 23.9%, from $188.8 million in the three months ended September 30,
2020.
Operating income and operating margin
Consolidated operating income. Operating income was $338.7 million in the three
months ended September 30, 2021, an increase of $74.2 million, or 28.0%, from
$264.5 million in the comparable prior period. Our operating margin was 44.8%
and 45.2% for the three months ended September 30, 2021 and 2020, respectively.
The increase in operating income was driven primarily by the increases in
transaction volume as the business recovered from the effects of the COVID-19
pandemic driving organic growth, the favorable impact of fuel prices of $17
million, and favorable movements in the foreign exchange rates of $7 million.
These increases were partially offset by unfavorable fuel price spreads of
approximately $4 million. The lower operating margin was driven by incremental
spending on sales in the third quarter of 2021 over the comparable prior period.
For the purpose of segment operating results, we calculate segment operating
income by subtracting segment operating expenses from segment revenues, net.
Segment operating margin is calculated by dividing segment operating income by
segment revenues, net.

North America segment operating income. North America operating income was
$213.4 million in the three months ended September 30, 2021, an increase of
$60.1 million, or 39.2%, from $153.3 million in the comparable prior period.
North America operating margin was 41.0% and 39.9% for the three months ended
September 30, 2021 and 2020, respectively. These increases were primarily driven
by increases in transaction volume as the business recovered from the effects of
the COVID-19 pandemic driving organic growth, the favorable impact of fuel
prices of $15 million and slightly favorable movements in the foreign exchange
rates. These increases were partially offset by unfavorable fuel price spreads
of approximately $4 million.

Brazil segment operating income. Brazil operating income was $39.9 million in the three months ended September 30, 2021, an increase of $4.3 million, or 12.0%, from $35.6 million in the comparable prior period. Brazil operating margin was 42.0%


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and 44.7% for the three months ended September 30, 2021 and 2020, respectively.
The increase in operating income was primarily driven by increases in
transaction volume as the business recovered from the effects of the COVID-19
pandemic driving organic growth. The lower operating margin was driven by
incremental spending on sales in the third quarter of 2021 over the comparable
prior period.
International segment operating income. International operating income was $85.4
million in the three months ended September 30, 2021, an increase of $9.8
million or 13.0%, from $75.6 million in the comparable prior period.
International operating margin was 61.0% and 62.0% for the three months ended
September 30, 2021 and 2020, respectively. The increase in operating income was
driven primarily by increases in transaction volume as the business recovered
from the effects of the COVID-19 pandemic driving organic growth, favorable
movements in the foreign exchange rates of $5 million and favorable impact of
fuel prices of $2 million. The lower operating margin was driven by incremental
spending on sales in the third quarter of 2021 over the comparable prior period.

Nine months ended September 30, 2021 compared to the nine months ended September
30, 2020
The following table sets forth selected unaudited consolidated statements of
income and selected operational data for the nine months ended September 30,
2021 and 2020 (in millions, except percentages)*.
                                  Nine Months                                     Nine Months
                                     Ended                                           Ended
                                 September 30,            % of Total             September 30,            % of Total               Increase
(Unaudited)                          2021                Revenues, net               2020                Revenues, net            (decrease)             % Change
Revenues, net:
North America                    $  1,366.2                        67.2  %       $  1,176.0                        66.4  %       $    190.2                   16.2  %
Brazil                                262.5                        12.9  %            253.7                        14.3  %              8.8                    3.5  %
International                         402.8                        19.8  %            341.9                        19.3  %             61.0                   17.8  %
Total revenues, net                 2,031.5                       100.0  %          1,771.5                       100.0  %            260.0                   14.7  %
Consolidated operating
expenses:
Processing                            388.3                        19.1  %            474.8                        26.8  %            (86.6)                 (18.2) %
Selling                               186.5                         9.2  %            145.0                         8.2  %             41.5                   28.6  %
General and administrative            345.2                        17.0  %            283.7                        16.0  %             61.4                   21.7  %
Depreciation and
amortization                          209.2                        10.3  %            190.1                        10.7  %             19.1                   10.0  %
Other operating, net                    0.1                           -  %             (0.5)                          -  %             (0.6)                       NM
Operating income                      902.3                        44.4  %            678.3                        38.3  %            223.9                   33.0  %
Investment gain                           -                           -  %            (30.0)                       (1.7) %             30.0                 (100.0) %
Other expense (income),
net                                     3.7                         0.2  %            (10.5)                       (0.6) %             14.2                        NM
Interest expense, net                  92.3                         4.5  %             99.5                         5.6  %             (7.2)                  (7.2) %

Provision for income taxes            191.8                         9.4  %            125.0                         7.1  %             66.9                   53.5  %
Net income                       $    614.5                        30.2  %       $    494.4                        27.9  %       $    120.1                   24.3  %
Operating income for
segments:
North America                    $    554.6                                      $    372.2                                      $    182.4                   49.0  %
Brazil                                105.4                                           104.5                                             1.0                    0.9  %
International                         242.2                                           201.6                                            40.6                   20.1  %
Operating income                 $    902.3                                      $    678.3                                      $    223.9                   33.0  %
Operating margin for
segments:
North America                          40.6  %                                         31.7  %                                          8.9  %
Brazil                                 40.2  %                                         41.2  %                                         (1.0) %
International                          60.1  %                                         59.0  %                                          1.1  %
Consolidated                           44.4  %                                         38.3  %                                          6.1  %



NM = Not Meaningful
*The sum of the columns and rows may not calculate due to rounding.

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Revenues, net
Our consolidated revenues were $2,031.5 million, in the nine months ended
September 30, 2021, an increase of $260.0 million, or 14.7%, from $1,771.5
million in the nine months ended September 30, 2020. Organically, consolidated
revenues increased by approximately 10%. Consolidated revenues and organic
growth increased primarily due to increases in transaction volume as the
business recovered from the effects of the COVID-19 pandemic. The increase was
also due to the impact of acquisitions completed in 2020 and 2021 of
approximately $64 million and the positive impact of the macroeconomic
environment.
Although we cannot precisely measure the impact of the macroeconomic
environment, in total we believe it had a positive impact on our consolidated
revenues for the nine months ended September 30, 2021 over the comparable period
in 2020 of approximately $3 million, driven primarily by the favorable impact of
fuel prices of approximately $33 million and favorable changes in foreign
exchange rates of approximately $19 million. These increases were partially
offset by unfavorable fuel price spreads of approximately $49 million.

North America segment revenues, net
North America segment revenues were $1,366.2 million in the nine months ended
September 30, 2021, an increase of $190.2 million, or 16.2%, from $1,176.0
million in the nine months ended September 30, 2020. Organically, North America
segment revenues increased by approximately 11%. North America revenues and
organic growth increased primarily due to increases in transaction volume as the
business recovered from the effects of the COVID-19 pandemic. The increase in
North America revenues was also due to the impact of acquisitions completed in
2020 and 2021 of approximately $63 million, partially offset by the negative
impact of the macroeconomic environment.
Although we cannot precisely measure the impact of the macroeconomic
environment, in total we believe it had a negative impact on our North America
segment revenues in the nine months ended September 30, 2021 over the comparable
period in 2020 of approximately $10 million, driven primarily by unfavorable
fuel price spreads of approximately $49 million. This decrease was partially
offset by the favorable impact of fuel prices of approximately $29 million and
favorable changes in foreign exchange rates of approximately $10 million in our
cross-border payments business.

Brazil segment revenues, net
Brazil segment revenues were $262.5 million in the nine months ended September
30, 2021, an increase of $8.8 million, or 3.5%, from $253.7 million in the nine
months ended September 30, 2020. Organically, Brazil segment revenues increased
by approximately 10%. Brazil revenues and organic growth increased primarily due
to increases in toll tags sold as the business recovered from the effects of
COVID-19 pandemic. Organic growth was partially offset by the unfavorable impact
of foreign exchange rates of approximately $16 million for the nine months ended
September 30, 2021 over the comparable period in 2020.

International segment revenues, net
International segment revenues were $402.8 million in the nine months ended
September 30, 2021, an increase of $61.0 million, or 17.8%, from $341.9 million
in the nine months ended September 30, 2020. Organically, International segment
revenues increased by approximately 9%. International revenues and organic
growth increased primarily due to increases in transaction volume as the
business recovered from the effects of the COVID-19 pandemic. Although we cannot
precisely measure the impact of the macroeconomic environment, in total we
believe it had a positive impact on our International segment revenues in the
nine months ended September 30, 2021 over the comparable period in 2020 of
approximately $29 million, driven primarily by favorable changes in foreign
exchange rates of approximately $25 million primarily in our U.K. business, and
the favorable impact of fuel prices of approximately $4 million.
Consolidated operating expenses
Processing. Processing expenses were $388.3 million in the nine months ended
September 30, 2021, a decrease of $86.6 million, or 18.2%, from $474.8 million
in the comparable prior period. Decreases in processing expenses were primarily
due to lower bad debt expense of approximately $133 million, which included a
write-off of a customer receivable in our cross-border payments business of
approximately $90 million in the first quarter of 2020. The remaining change in
processing expense was driven by incremental expenses related to higher volumes
processed of approximately $23 million and additional expenses related to
acquisitions completed in 2020 and 2021 of approximately $22 million.
Selling. Selling expenses were $186.5 million in the nine months ended September
30, 2021, an increase of $41.5 million, or 28.6%, from $145.0 million in the
comparable prior period. Increases in selling expenses were primarily due to
higher commissions and other variable costs due to increased sales volumes in
the nine months ended September 30, 2021 and expenses related to acquisitions
completed in 2020 and 2021 of approximately $18 million.
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General and administrative. General and administrative expenses were $345.2
million in the nine months ended September 30, 2021, an increase of $61.4
million, or 21.7% from $283.7 million in the comparable prior period. Increases
in general and administrative expenses were primarily due to the impact of
acquisitions completed in 2020 and 2021 of approximately $22 million, increased
stock based compensation expense of $14 million and increased professional fees
of $10 million.

Depreciation and amortization. Depreciation and amortization expenses were
$209.2 million in the nine months ended September 30, 2021, an increase of $19.1
million, or 10.0% from $190.1 million in the comparable prior period. Increases
in depreciation and amortization expenses were primarily due to expenses related
to acquisitions completed in 2020 and 2021 of approximately $16 million.

Investment gain. Investment gain of $30.0 million in the nine months ended September 30, 2020 relates to the gain on the sale of our investment in bill.com during the third quarter of 2020.



Other expense (income), net. Other expense, net was $3.7 million in the nine
months ended September 30, 2021, compared to other income, net of $10.5 million
in the nine months ended September 30, 2020. Other income in the nine months
ended September 30, 2020 includes a $7 million favorable purchase price
settlement from our Cambridge acquisition.

Interest expense, net. Interest expense, net was $92.3 million in the nine
months ended September 30, 2021, a decrease of $7.2 million, or 7.2%, from $99.5
million in the comparable prior period. The decrease in interest expense is
primarily due to decreases in LIBOR, partially offset by increased borrowings on
our Credit Facility. The following table sets forth the average interest rates
paid on borrowings under our Credit Facility, excluding the related unused
facility fees and swaps.

                                                                         Nine Months Ended September 30,
(Unaudited)                                                            2021                           2020
Term loan A                                                                    1.61  %                       2.23  %
Term loan B                                                                    1.85  %                       2.53  %
Revolving line of credit A, B & C USD Borrowings                               1.60  %                       2.27  %
Revolving line of credit B GBP Borrowings                                      1.52  %                       1.79  %
Foreign swing line                                                             1.54  %                       1.73  %


The average unused facility fee for the Credit Facility was 0.30% in the in the
nine months ended September 30, 2021.
On January 22, 2019, we entered into three interest rate swap contracts. The
objective of these interest rate swap contracts is to reduce the variability of
cash flows in the previously unhedged interest payments associated with $2.0
billion of variable rate debt, tied to the one month LIBOR benchmark interest
rate. During the nine months ended September 30, 2021, as a result of these
swaps, we incurred additional interest expense of approximately $37.1 million or
2.45% over the average LIBOR rates on $2 billion of borrowings.

Provision for income taxes. The provision for income taxes and effective tax
rate was $191.8 million and 23.8% in the nine months ended September 30, 2021,
an increase of $66.9 million, or 53.5% change, from $125.0 million and 20.2%,
respectively, in the comparable prior period. The increase in the provision for
income taxes was driven primarily by an increase in pre-tax earnings. The
increase in the effective tax rate was primarily due to less excess tax benefit
on stock option exercises in 2021 over the comparable period in 2020.
Net income. For the reasons discussed above, our net income was $614.5 million
in the nine months ended September 30, 2021, an increase of $120.1 million, or
24.3% from $494.4 million in the nine months ended 2020.
Operating income and operating margin
Consolidated operating income. Operating income was $902.3 million in the nine
months ended September 30, 2021, an increase of $223.9 million, or 33.0%, from
$678.3 million in the comparable prior period. Our operating margin was 44.4%
and 38.3% for the nine months ended September 30, 2021 and 2020, respectively.
These increases were primarily driven by the write-off of a customer receivable
in our cross-border payments business of approximately $90 million in the first
quarter of 2020, increases in volume as the business recovered from the effects
of the COVID-19 pandemic driving organic growth, the impact of favorable fuel
prices of approximately $33 million and favorable movements in foreign exchange
rates of approximately $13 million These increases were partially offset by the
unfavorable impact of fuel spread margins of $49 million.
                                       37
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For the purpose of segment operating results, we calculate segment operating
income by subtracting segment operating expenses from segment revenue. Segment
operating margin is calculated by dividing segment operating income by segment
revenue.

North America segment operating income. North America operating income was
$554.6 million in the nine months ended September 30, 2021, an increase of
$182.4 million, or 49.0%, from $372.2 million in the comparable prior period.
North America operating margin was 40.6% and 31.7% for the nine months ended
September 30, 2021 and 2020, respectively. These increases were due primarily to
the write-off of a customer receivable in our cross-border payments business of
approximately $90 million in the first quarter of 2020, increases in volume as
the business recovered from the effects of the COVID-19 pandemic driving organic
growth, the impact of favorable fuel prices of approximately $29 million and
favorable movements in the foreign exchange rates of $4 million. These increases
were partially offset by the unfavorable impact of fuel spread margins of $49
million.

Brazil segment operating income. Brazil operating income was $105.4 million in
the nine months ended September 30, 2021, an increase of $1.0 million, or 0.9%,
from $104.5 million in the comparable prior period. Brazil operating margin was
40.2% and 41.2% for the nine months ended September 30, 2021 and 2020,
respectively. Brazil operating income benefited from the favorable impact of
organic growth. These increases were offset by the unfavorable impact of foreign
exchange rates of $6 million.

International segment operating income. International operating income was
$242.2 million in the nine months ended September 30, 2021, an increase of $40.6
million, or 20.1%, from $201.6 million in the comparable prior period.
International operating margin was 60.1% and 59.0% for the nine months ended
September 30, 2021 and 2020, respectively. These increases were primarily due to
an increase in transaction volume as the business recovered from the effects of
the COVID-19 pandemic driving organic growth, the favorable impact of foreign
exchange rates of $16 million and the favorable impact of fuel prices of $4
million.

Liquidity and capital resources
Our principal liquidity requirements are to service and repay our indebtedness,
make acquisitions of businesses and commercial account portfolios, repurchase
shares of our common stock and meet working capital, tax and capital expenditure
needs.
Sources of liquidity. We believe that our current level of cash and borrowing
capacity under our Credit Facility and Securitization Facility (each defined
below), together with expected future cash flows from operations, will be
sufficient to meet the needs of our existing operations and planned requirements
for the foreseeable future, based on our current assumptions. At September 30,
2021, we had approximately $1.9 billion in total liquidity, consisting of
approximately $650 million available under our Credit Facility (defined below)
and unrestricted cash of $1.3 billion. Restricted cash represents primarily
customer deposits in our Comdata business in the U.S., as well as collateral
received from customers for cross-currency transactions in our cross-border
payments business, which are restricted from use other than to repay customer
deposits, as well as to secure and settle cross-currency transactions.
We also utilize an accounts receivable Securitization Facility to finance a
majority of our domestic receivables, to lower our cost of borrowing and more
efficiently use capital. We generate and record accounts receivable when a
customer makes a purchase from a merchant using one of our card solutions and
generally pay merchants before collecting the receivable. As a result, we
utilize the Securitization Facility as a source of liquidity to provide the cash
flow required to fund merchant payments while we collect customer balances.
These balances are primarily composed of charge balances, which are typically
billed to the customer on a weekly, semimonthly or monthly basis, and are
generally required to be paid within 14 days of billing. We also consider the
undrawn amounts under our Securitization Facility and Credit Facility as funds
available for working capital purposes and acquisitions. At September 30, 2021,
we had no additional liquidity under our Securitization Facility.
The Company has determined that outside basis differences associated with our
investment in foreign subsidiaries would not result in a material deferred tax
liability, and consistent with our assertion that these amounts continue to be
indefinitely reinvested, have not recorded incremental income taxes for the
additional outside basis differences.
We cannot assure you that our assumptions used to estimate our liquidity
requirements will remain accurate due to the unprecedented nature of the
disruption to our operations and the unpredictability of the ongoing COVID-19
global pandemic. As a consequence, our estimates of the duration of the pandemic
and the severity of the impact on our future earnings and cash flows could
change and have a material impact on our results of operations and financial
condition.
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Cash flows
The following table summarizes our cash flows for the nine month periods ended
September 30, 2021 and 2020 (in millions).

                                                                Nine Months Ended September 30,
(Unaudited)                                                     2021                      2020
Net cash provided by operating activities                $          599.5          $        1,214.7
Net cash used in investing activities                              (621.8)                    (74.6)
Net cash provided by (used in) financing
activities                                                          579.2                  (1,221.9)


Operating activities. Net cash provided by operating activities was $599.5
million in the nine months ended September 30, 2021, a decrease from $1.2
billion in the comparable prior period. The decrease in operating cash flows was
primarily due to unfavorable working capital movements primarily due to the
timing of cash receipts and payments in the nine months ended September 30, 2021
over the comparable period in 2020.
Investing activities. Net cash used in investing activities was $621.8 million
in the nine months ended September 30, 2021 compared to $74.6 million in the
nine months ended September 30, 2020. The increased use of cash was primarily
due to incremental cash paid for acquisitions in the nine months ended September
30, 2021 over the comparable period in 2020.
Financing activities. Net cash provided by financing activities was $579.2
million in the nine months ended September 30, 2021, compared to net cash used
in financing activities of $1,221.9 million in the nine months ended September
30, 2020. The increase in net cash provided by financing activities was
primarily due to increased net borrowings on our Credit Facility of $1,221
million and increased net borrowings on our Securitization Facility of $681
million, which were partially offset by an increase in cash used to repurchase
common stock of $34 million in the nine months ended September 30, 2021 over the
comparable period in 2020.
Capital spending summary
Our capital expenditures were $74.5 million in the nine months ended September
30, 2021, an increase of $19.4 million or 35.3%, from $55.0 million in the
comparable prior period due to the impact of acquisitions and continued
investments in technology.
Credit Facility
FLEETCOR Technologies Operating Company, LLC, and certain of our domestic and
foreign owned subsidiaries, as designated co-borrowers (the "Borrowers"), are
parties to a $5.66 billion Credit Agreement (the "Credit Agreement"), with Bank
of America, N.A., as administrative agent, swing line lender and local currency
issuer, and a syndicate of financial institutions (the "Lenders"), which has
been amended multiple times. The Credit Agreement provides for senior secured
credit facilities (collectively, the "Credit Facility") consisting of a
revolving credit facility in the amount of $1.285 billion, a term loan A
facility in the amount of $3.225 billion and a term loan B facility in the
amount of $1.150 billion as of September 30, 2021. The revolving credit facility
consists of (a) a revolving A credit facility in the amount of $800 million,
with sublimits for letters of credit and swing line loans, (b) a revolving B
facility in the amount of $450 million with borrowings in U.S. dollars, euros,
British pounds, Japanese yen or other currency as agreed in advance, and a
sublimit for swing line loans, and (c) a revolving C facility in the amount of
$35 million for borrowings in U.S. dollars, Australian dollars or New Zealand
dollars. The Credit Agreement also includes an accordion feature for borrowing
an additional $750 million in term loan A, term loan B, revolving A or
revolving B facility debt and an unlimited amount when the leverage ratio on a
pro-forma basis is less than 3.00 to 1.00. Proceeds from the credit facilities
may be used for working capital purposes, acquisitions, and other general
corporate purposes. On April 24, 2020, we entered into the eighth amendment to
the Credit Agreement to add a $250 million revolving D facility. On August 20,
2020, we determined that, due to a recovery in our business operations and other
safeguards being in place, the revolving D facility was no longer necessary and
the facility was terminated. The maturity date for the term loan A and revolving
credit facilities A, B and C is December 19, 2023. On April 30, 2021, we entered
into the ninth amendment to the Credit Agreement. The amendment provided for a
new seven-year $1.150 billion term loan B. The existing term loan B was paid off
with proceeds from the new term loan B. The new term loan B has a maturity date
of April 30, 2028, and interest rates remain unchanged.
Interest on amounts outstanding under the Credit Agreement (other than the term
loan B) accrues based on the British Bankers Association LIBOR Rate (the
"Eurocurrency Rate"), plus a margin based on a leverage ratio, or at 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 loan B facility accrues based on the Eurocurrency Rate plus
1.75% for Eurocurrency Loans or the Base Rate plus 0.75% for Base Rate Loans.
The Eurocurrency rate has a 0% floor. In addition, we pay a quarterly commitment
fee at a rate per annum ranging from 0.25% to 0.35% of the daily unused portion
of the Credit Facility.
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At September 30, 2021, the interest rate on the term loan A was 1.58%, the
interest rate on the term loan B was 1.83% and the interest rate on the
revolving A facility and revolving B facility was 1.58%. The unused credit
facility fee was 0.30% at September 30, 2021.
At September 30, 2021, we had $2.8 billion in borrowings outstanding on the term
loan A, net of discounts, and $1.1 billion in borrowings outstanding on the term
loan B, net of discounts. We have unamortized debt issuance costs of $3.7
million related to the revolving facilities as of September 30, 2021 recorded
within other assets in the Unaudited Consolidated Balance Sheet. We have
unamortized debt discounts of $12.2 million and debt issuance costs of $6.1
million related to our term loans at September 30, 2021.
During the nine months ended September 30, 2021, we made principal payments of
$462 million on the term loans, $799 million on the revolving facilities, and
$52 million on the swing line revolving facility.
As of September 30, 2021, we were in compliance with each of the covenants under
the Credit Agreement.
Cash Flow Hedges
On January 22, 2019, we entered into three swap contracts. The objective of
these swap contracts is to reduce the variability of cash flows in the
previously unhedged interest payments associated with $2.0 billion of variable
rate debt, the sole source of which is due to changes in the LIBOR benchmark
interest rate. These swap contracts qualify as hedging instruments and have been
designated as cash flow hedges. For each of these swap contracts, we pay a fixed
monthly rate and receive one month LIBOR. We reclassified approximately $37.1
million of losses from accumulated other comprehensive income into interest
expense during the nine months ended September 30, 2021 as a result of these
hedging instruments.
Securitization Facility
We are party to a $1.3 billion receivables purchase agreement among FLEETCOR
Funding LLC, as seller, PNC Bank, National Association as administrator, and
various purchaser agents, conduit purchasers and related committed purchasers
parties thereto. We refer to this arrangement as the Securitization Facility.
There have been several amendments to the Securitization Facility. On November
13, 2020, we extended the Securitization Facility termination date to November
12, 2021, added an uncommitted accordion to increase the purchase limit by up to
$500 million, revised obligor concentration limits and reserve calculations,
added a 0.375% LIBOR floor and modified certain swing line terms. In addition,
the program fee for LIBOR borrowings increased from 0.90% to 1.25% and the
program fee for Commercial Paper Rate borrowings increased from 0.80% to 1.15%.
On March 29, 2021, we amended the Securitization Facility to include a new three
year maturity date, reduced the LIBOR floor to 0 bps, improved margins, and
increased the swing line from $100 million to $250 million. On September 15,
2021, the Company entered into the ninth amendment to the Securitization
Facility. The amendment increased the Securitization Facility commitment from
$1.0 billion to $1.3 billion. The maturity date for our Securitization Facility
is March 29, 2024.
We were in compliance with the financial covenant requirements related to our
Securitization Facility as of September 30, 2021.
Stock Repurchase Program
The Company's Board of Directors (the "Board") 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 July
27, 2021, the Board increased the aggregate size of the Program by $1.0 billion,
to $5.1 billion. Since the beginning of the Program through September 30, 2021,
17,742,577 shares have been repurchased for an aggregate purchase price of $3.9
billion, leaving the Company up to $1.2 billion available under the Program for
future repurchases in shares of its common stock.
Any stock repurchases may be made at times and in such amounts as deemed
appropriate. 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 the Company may possess. Any repurchases have been and are
expected to be funded by a combination of available cash flow from the business,
working capital and debt.
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Critical accounting policies and estimates
In applying the accounting policies that we use to prepare our consolidated
financial statements, we necessarily make accounting estimates that affect our
reported amounts of assets, liabilities, revenues and expenses. Some of these
estimates require us to make assumptions about matters that are highly uncertain
at the time we make the accounting estimates. We base these assumptions and the
resulting estimates on historical information and other factors that we believe
to be reasonable under the circumstances, and we evaluate these assumptions and
estimates on an ongoing basis. In many instances, however, we reasonably could
have used different accounting estimates and, in other instances, changes in our
accounting estimates could occur from period to period, with the result in each
case being a material change in the financial statement presentation of our
financial condition or results of operations. We refer to estimates of this type
as critical accounting estimates.
Accounting estimates necessarily require subjective determinations about future
events and conditions. During the three months ended September 30, 2021, we have
not adopted any new critical accounting policies that had a significant impact
upon our consolidated financial statements, have not changed any critical
accounting policies and have not changed the application of any critical
accounting policies from the year ended December 31, 2020. For critical
accounting policies, refer to the Critical Accounting Estimates in Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in our Annual Report on Form 10-K for the year ended
December 31, 2020 and our summary of significant accounting policies in Note 1
of our Notes to the Unaudited Consolidated Financial Statements in this
Quarterly Report on Form 10-Q.
Management's Use of Non-GAAP Financial Measures
We have included in the discussion above certain financial measures that were
not prepared in accordance with GAAP. Any analysis of non-GAAP financial
measures should be used only in conjunction with results presented in accordance
with GAAP. Below, we define the non-GAAP financial measures, provide a
reconciliation of each non-GAAP financial measure to the most directly
comparable financial measure calculated in accordance with GAAP, and discuss the
reasons that we believe this information is useful to management and may be
useful to investors.

Pro forma and macro adjusted revenue and transactions by solution. We define the
pro forma and macro adjusted revenue as revenue, net as reflected in our
statement of income, adjusted to eliminate the impact of the macroeconomic
environment and the impact of acquisitions and dispositions. The macroeconomic
environment includes the impact that market fuel price spreads, fuel prices and
foreign exchange rates have on our business. We use pro forma and macro adjusted
revenue and transactions to evaluate the organic growth in our revenue and the
associated transactions.
Organic revenue growth is calculated as revenue growth in the current period
adjusted for the impact of changes in the macroeconomic environment (to include
fuel price, fuel price spreads and changes in foreign exchange rates) over
revenue in the comparable prior period adjusted to include or remove the impact
of acquisitions and/or divestitures and non-recurring items that have occurred
subsequent to that period. We believe that organic revenue growth on a
macro-neutral, one-time item, and consistent
acquisition/divestiture/non-recurring item basis is useful to investors for
understanding the performance of FLEETCOR.
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Set forth below is a reconciliation of pro forma and macro adjusted revenue and
key performance metric by solution to the most directly comparable GAAP measure,
revenue, net and key performance metric (in millions):
                                                                   Revenues, net                                          Key Performance Metric
                                                             Three Months Ended September 30,                        Three Months Ended September 30,
(Unaudited)                                                  2021*                   2020*                        2021*                             2020*
FUEL - TRANSACTIONS
Pro forma and macro adjusted                          $           288.7          $    255.6                        117.7                               113.9
Impact of acquisitions/dispositions                                   -                (0.5)                           -                                (0.3)
Impact of fuel prices/spread                                       12.7                   -                            -                                   -
Impact of foreign exchange rates                                    5.3                   -                            -                                   -
As reported                                           $           306.8          $    255.1                        117.7                               113.6

CORPORATE PAYMENTS - SPEND
Pro forma and macro adjusted                          $           165.6          $    135.9                       25,666                              19,617
Impact of acquisitions/dispositions                                   -               (29.4)                           -                              (4,049)
Impact of fuel prices/spread                                        0.4                   -                            -                                   -
Impact of foreign exchange rates                                    2.8                   -                            -                                   -
As reported                                           $           168.7          $    106.5                       25,666                              15,567
TOLLS - TAGS
Pro forma and macro adjusted                          $            76.9          $     67.6                          6.0                                 5.4
Impact of acquisitions/dispositions                                   -                   -                            -                                   -
Impact of fuel prices/spread                                          -                   -                            -                                   -
Impact of foreign exchange rates                                    2.2                   -                            -                                   -
As reported                                           $            79.0          $     67.6                          6.0                                 5.4
LODGING - ROOM NIGHTS
Pro forma and macro adjusted                          $            85.2          $     60.7                          7.6                                 6.1
Impact of acquisitions/dispositions                                   -                (7.9)                           -                                (0.7)
Impact of fuel prices/spread                                          -                   -                            -                                   -
Impact of foreign exchange rates                                      -                   -                            -                                   -
As reported                                           $            85.2          $     52.9                          7.6                                 5.4
GIFT - TRANSACTIONS
Pro forma and macro adjusted                          $            48.6          $     39.1                        256.2                               242.7
Impact of acquisitions/dispositions                                   -                   -                            -                                   -
Impact of fuel prices/spread                                          -                   -                            -                                   -
Impact of foreign exchange rates                                      -                   -                            -                                   -
As reported                                           $            48.6          $     39.1                        256.2                               242.7
OTHER1- TRANSACTIONS
Pro forma and macro adjusted                          $            65.4          $     64.1                          8.9                                 9.9
Impact of acquisitions/dispositions                                   -                   -                            -                                   -
Impact of fuel prices/spread                                          -                   -                            -                                   -
Impact of foreign exchange rates                                    1.8                   -                            -                                   -
As reported                                           $            67.2          $     64.1                          8.9                                 9.9

FLEETCOR CONSOLIDATED REVENUES
Pro forma and macro adjusted                          $           730.3          $    623.0
Impact of acquisitions/dispositions                                   -     

(37.7)


Impact of fuel prices/spread2                                      13.1                   -                              Intentionally Left Blank
Impact of foreign exchange rates2                                  12.1                   -
As reported                                           $           755.5     

$ 585.3



* Columns may not calculate due to rounding.
1 Other includes telematics, maintenance, food, transportation and payroll card related businesses.
2 Revenues reflect an estimated $17 million positive impact from fuel prices and approximately $12 million positive impact due to movements in foreign exchange
rates, partially offset by $4 million negative impact from fuel price spreads.


Adjusted net income and adjusted net income per diluted share. We have defined
the non-GAAP measure adjusted net income as net income as reflected in our
Statement of Income, adjusted to eliminate (a) non-cash stock based compensation
expense related to share based compensation awards, (b) amortization of deferred
financing costs, discounts, intangible assets, and amortization of the premium
recognized on the purchase of receivables, (c) integration and deal related
costs, and (d) other non-recurring items, including unusual credit losses
occurring largely, but not necessarily exclusively, due to the COVID-19
pandemic, the impact of discrete tax items, impairment charges, asset
write-offs, restructuring costs, gains due to disposition of assets/businesses,
loss on extinguishment of debt, and legal settlements.
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We have defined the non-GAAP measure adjusted net income per diluted share as
the calculation previously noted divided by the weighted average diluted shares
outstanding as reflected in our statement of income.
Adjusted net income and adjusted net income per diluted share are supplemental
measures of operating performance that do not represent and should not be
considered as an alternative to net income, net income per diluted share or cash
flow from operations. as determined by GAAP. We believe it is useful to exclude
non-cash share-based compensation expense from adjusted net income because
non-cash equity grants made at a certain price and point in time do not
necessarily reflect how our business is performing at any particular time and
share-based compensation expense is not a key measure of our core operating
performance. We also believe that amortization expense can vary substantially
from company to company and from period to period depending upon their financing
and accounting methods, the fair value and average expected life of their
acquired intangible assets, their capital structures and the method by which
their assets were acquired; therefore, we have excluded amortization expense
from our adjusted net income. Integration and deal related costs represent
business acquisition transaction costs, professional services fees, short-term
retention bonuses and system migration costs, etc., that are not indicative of
the performance of the underlying business. We also believe that certain
expenses and recoveries (e.g. legal settlements, write-off of customer
receivable, etc.), gains and losses on investments, and impairment charges do
not necessarily reflect how our investments and business are performing. We
adjust net income for the tax effect of each of these non-tax items.
Management uses adjusted net income, adjusted net income per diluted share and
organic revenue growth:
•as measurements of operating performance because they assist us in comparing
our operating performance on a consistent basis;
•for planning purposes, including the preparation of our internal annual
operating budget;
•to allocate resources to enhance the financial performance of our business; and
•to evaluate the performance and effectiveness of our operational strategies.
Set forth below is a reconciliation of adjusted net income and adjusted net
income per diluted share to the most directly comparable GAAP measure, net
income and net income per diluted share (in thousands, except per share
amounts)*:
                                                              Three Months Ended September 30,       Nine Months Ended September 30,
(Unaudited)                                                       2021                2020               2021                2020
Net income                                                    $  234,007

$ 188,817 $ 614,493 $ 494,365 Net income per diluted share

$     2.80          $    2.19          $     7.24          $    5.68
Stock-based compensation                                          16,453             11,905              52,085             35,069
Amortization1                                                     56,381             49,078             158,482            146,995

Investment loss (gain)                                                 -              1,330                  (9)           (30,008)
Loss on extinguishment of debt                                         -                  -               6,230                  -
Integration and deal related costs                                 6,638              1,768              18,132             11,035
Restructuring and related (subsidies) costs                         (568)               185              (1,922)             4,912
Legal settlements/litigation                                         561              2,048               5,619             (2,989)
Write-off of customer receivable2                                      -                  -                   -             90,058
Total pre-tax adjustments                                         79,465             66,313             238,617            255,072
Income taxes3                                                    (19,114)           (13,196)            (48,193)           (45,581)

Adjusted net income                                           $  294,358

$ 241,934 $ 804,917 $ 703,856 Adjusted net income per diluted share

$     3.52          $    2.80          $     9.48          $    8.09
Diluted shares                                                    83,716             86,273              84,917             87,006


1 Includes amortization related to intangible assets, premium on receivables, deferred
financing costs and debt discounts.
2 Represents a loss in the first quarter of 2020 from a large client in our cross-border
payments business entering voluntary bankruptcy due to the impact of the COVID-19
pandemic.
3 Represents provision for income taxes of pre-tax adjustments. 2021 includes
measurement of deferreds due to the increase in UK corporate tax rate from 19% to 25% of
$6.5 million. 2020 includes a tax reserve adjustment related to prior year tax positions
of $9.8 million.
*Columns may not calculate due to rounding.





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Special Cautionary Notice Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of the federal securities laws. Statements that are not historical
facts, including statements about FLEETCOR's beliefs, expectations and future
performance, are forward-looking statements. Forward-looking statements can be
identified by the use of words such as "anticipate," "intend," "believe,"
"estimate," "plan," "seek," "project" or "expect," "may," "will," "would,"
"could" or "should," the negative of these terms or other comparable
terminology.
These forward-looking statements are not a guarantee of performance, and you
should not place undue reliance on such statements. We have based these
forward-looking statements largely on our current expectations and projections
about future events. Forward-looking statements are subject to many
uncertainties and other variable circumstances, including those discussed in
"Risk Factors" in our Annual Report on Form 10-K for the year ended December 31,
2020 filed with the Securities and Exchange Commission on February 26, 2021,
many of which are outside of our control, that could cause our actual results
and experience to differ materially from any forward-looking statement.

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



•regulatory measures, voluntary actions, or changes in consumer preferences,
that impact our transaction volume, including social distancing,
shelter-in-place, shutdowns of nonessential businesses and similar measures
imposed or undertaken in an effort to contain and mitigate the spread of
COVID-19 and the impact of vaccine mandates on our workforce and our suppliers
and vendors;
•the impact of macroeconomic conditions and whether expected trends, including
foreign currency exchange rates, 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 solutions, 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 expected credit losses;
•our ability to securitize our trade 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;
•the international operational and political risks and compliance and regulatory
risks and costs associated with international operations;
•our ability to develop and implement new technology, products, and services;
•any alleged infringement of intellectual property rights of others and our
ability to protect our intellectual property;
•the regulation, supervision, and examination of our business by foreign and
domestic governmental authorities, as well as litigation and regulatory actions,
including the lawsuit recently filed by the Federal Trade Commission (FTC);
•the impact of regulations relating to privacy, information security and data
protection; use of third-party vendors and ongoing third-party business
relationships; and failure to comply with anti-money laundering (AML) and
anti-terrorism financing laws;
•changes in our senior management team and our ability to attract, motivate and
retain qualified personnel consistent with our strategic plan;
•tax legislation initiatives or challenges to our tax positions and/or
interpretations, and state sales tax rules and regulations;
•the risks of mergers, acquisitions and divestitures, including, without
limitation, the related time and costs of implementing such transactions,
integrating operations as part of these transactions and possible failures to
achieve expected gains, revenue growth and/or expense savings from such
transactions; and
•the other factors and information in our Annual Report on Form 10-K and other
filings that we make with the SEC under the Exchange Act and Securities Act. See
"Risk Factors" in our Annual Report on Form 10-K for the year ended December 31,
2020 filed with the Securities and Exchange Commission on February 26, 2021.

Given these risks and uncertainties, you are cautioned not to place undue
reliance on these forward-looking statements. The forward-looking statements
included in this report are made only as of the date hereof. We do not
undertake, and specifically disclaim, any obligation to update any such
statements or to publicly announce the results of any revisions to any of such
statements to reflect future events or developments.

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You may get FLEETCOR's Securities and Exchange Commission ("SEC") filings for
free by visiting the SEC web site at www.sec.gov.
This report includes non-GAAP financial measures, which are used by the Company
and investors as supplemental measures to evaluate the overall operating
performance of companies in our industry. By providing these non-GAAP financial
measures, together with reconciliations, we believe we are enhancing investors'
understanding of our business and our results of operations, as well as
assisting investors in evaluating how well we are executing strategic
initiatives. See "Management's Use of Non-GAAP Financial Measures" elsewhere in
this Quarterly Report on Form 10-Q for additional information regarding these
GAAP financial measures and a reconciliation to the nearest corresponding GAAP
measure.

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