Our Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") is intended to provide information that will assist the
reader with understanding our financial statements, the changes in key items in
those financial statements from year to year, and the primary factors that
accounted for those changes, as well as how certain accounting estimates affect
our financial statements. The discussion also provides information about the
financial results of the three segments of our business to provide a better
understanding of how those segments and their results affect our financial
condition and results of operations as a whole. Additionally, certain corporate
costs not allocated to our operating segments are discussed below.

Our MD&A is presented in the following sections:



•Overview

•Summary

•Results of Operations

•Liquidity and Capital Resources

•Critical Accounting Policies and Estimates

•Recently Adopted Accounting Standards



This discussion should be read in conjunction with our audited consolidated
financial statements as of December 31, 2021, the notes accompanying those
financial statements and MD&A as contained in our Annual Report on Form 10-K for
the year ended December 31, 2021, filed with the Securities and Exchange
Commission on March 1, 2022, and in conjunction with the condensed consolidated
financial statements and notes in Part I - Item 1 of this report.

Overview

WEX Inc. is the global commerce platform that simplifies the business of running
a business. We currently operate in three reportable segments: Fleet Solutions,
Travel and Corporate Solutions, and Health and Employee Benefit Solutions. The
Fleet Solutions segment provides payment processing, transaction processing, and
information management services specifically designed for the needs of fleets of
all sizes from small businesses to federal and state government fleets and
over-the-road carriers. The Travel and Corporate Solutions segment focuses on
the complex payment environment of global B2B payments, enabling customers to
utilize our payments solutions to integrate into their own workflows and manage
their accounts payable automation and spend management functions. The Health and
Employee Benefit Solutions segment provides a SaaS platform for consumer
directed healthcare benefits and a full-service benefit enrollment solution,
bringing together benefits administration, certain compliance services and
consumer-directed and benefits accounts. Additionally, WEX serves as the
non-bank custodian to certain HSA assets.

Summary

Recent Events



On March 7, 2022, WEX Inc. and SBI entered into a Share Purchase Agreement
whereby SBI sold, and WEX Inc. purchased, SBI's remaining 4.53 percent interest
in PO Holding for a purchase price of $234.0 million plus any interest accruing
pursuant to the terms of the Share Purchase Agreement. The purchase price is
payable in three installments of $76.7 million in each of March of 2024, 2025
and 2026, with a final payment of $4.0 million payable in March 2026. Pursuant
to the Share Purchase Agreement, WEX Inc. owes SBI interest on the outstanding
purchase price balance from March 2024 to March 2025 at the 12-month SOFR rate
(as determined on March 1, 2024) plus 1.25 percent and on the outstanding
balance from March 2025 to March 2026 at the 12-month SOFR rate (as determined
on March 3, 2025) plus 2.25 percent, except that no interest accrues on the $4.0
million payment due in March 2026. The Company recorded the deferred liability
at its net present value of $216.6 million. The associated discount will be
amortized to interest expense using the effective interest method over the
repayment term. The carrying value of the redeemable non-controlling interest
immediately prior to the acquisition date was $254.4 million, resulting in the
recognition of $37.8 million within the change in value of redeemable
non-controlling interest on the condensed consolidated statements of operations
for the three months ended March 31, 2022. The change in value of redeemable
non-controlling interest was offset by $3.5 million of deferred tax expense
resulting from the difference between the book and tax bases of the deferred
liability payable to SBI. The carrying value of the redeemable non-controlling
interest was reduced to zero as a result of the acquisition. This transaction
makes PO Holding, the direct parent of WEX Health, a wholly owned subsidiary of
WEX Inc. to which the Company is solely entitled to the economic benefits.


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Key Performance Indicators

Below are key metrics from the first quarter of 2022:



                                                                                                      Increase
                                                    Q1 2022             Q1 2021             Amount               Percent

Total volume (in millions):
Fleet Solutions                                  $ 21,704.3          $ 13,677.4          $  8,026.9                    59  %
Travel and Corporate Solutions                     20,064.9            13,339.3             6,725.6                    50  %
Health and Employee Benefit Solutions               3,063.2             2,851.9               211.3                     7  %
Total volume (in millions)                       $ 44,832.4          $ 29,868.6          $ 14,963.8                    50  %

Total purchase volume (in millions)              $ 27,829.9          $ 16,768.9          $ 11,061.0                    66  %

Fleet Solutions
Fuel transactions processed (in millions)             161.3               146.4                14.9                    10  %
Payment processing transactions (in millions)         132.7               118.4                14.3                    12  %

Average U.S. fuel price (US$ / gallon)           $     3.95          $     2.72          $     1.23                    45  %

Payment processing $ of fuel (in millions) $ 14,390.3 $ 9,177.0 $ 5,213.3

                    57  %

Travel and Corporate Solutions
Purchase volume (in millions)                    $ 11,809.4          $  6,107.7          $  5,701.7                    93  %

Health and Employee Benefit Solutions


  Purchase volume (in millions)                  $  1,630.2          $  1,484.2          $    146.0                    10  %
Average number of U.S. SaaS accounts (in
millions)                                              17.8                15.5                 2.3                    15  %


Total volume across the Company, which includes purchases on WEX-issued accounts
as well as purchases issued by others, but using the WEX platform, increased 50
percent over the first quarter of 2021 to $44.8 billion for the first quarter of
2022. Total purchase volume across the Company in the first quarter of 2022 grew
66 percent from the same period in the prior year reflecting strong double digit
growth rates in each of our segments, as further described below.

Fleet Solutions



•Fuel transactions processed increased approximately 10 percent from the first
quarter of 2021 to 161.3 million for the first quarter of 2022, substantially as
a result of increased transactions processed in North America.

•Payment processing transactions, which represents the total number of purchases
made by fleets that have a payment processing relationship with WEX where the
Company maintains the receivable for the total purchase, are up approximately 12
percent as compared to the same period last year, substantially as a result of
increased transactions processed in North America.

•The average U.S. fuel price per gallon during the first quarter of 2022 was $3.95, an approximate 45 percent increase from the same period last year.



•Payment processing $ of fuel, which represents the total dollar value of the
fuel purchased by fleets that have a payment processing relationship with the
Company, increased 57 percent for the first quarter of 2022 from the same period
last year, driven primarily by higher fuel prices.

Travel and Corporate Solutions



•Purchase volume, which represents the total dollar value of all WEX-issued
transactions that use WEX corporate card products and virtual card products, was
$11.8 billion for the first quarter of 2022, representing an increase of 93
percent from the same period last year. This increase was driven primarily by
volumes contributed by the acquisition of eNett and Optal, continued recovery in
domestic travel and tourism and increased volumes in our corporate payment
solutions business.

Health and Employee Benefit Solutions

•Purchase volume, which represents the total U.S. dollar value of all transactions where interchange is earned by WEX, was up approximately 10 percent as compared to the same period last year.


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•Average number of U.S. SaaS accounts, which represents the number of active
Consumer-Directed Health, COBRA, and billing accounts on our U.S. SaaS
platforms, grew by approximately 2.3 million for the first quarter of 2022, a 15
percent increase from the same period in the prior year.


Results of Operations



The Company does not allocate financing interest expense, change in fair value
of contingent consideration, foreign currency gains and losses, unrealized and
realized gains and losses on financial instruments, other non-operating gains
and losses, income taxes and adjustments attributable to non-controlling
interests to our operating segments, as management believes these items are
unpredictable and can obscure a segment's operating trends and results. In
addition, the Company does not allocate certain corporate expenses to our
operating segments, as these items are centrally controlled and are not directly
attributable to any reportable segment.

The Company's operating expenses consist of the following:

Cost of Services



•Processing costs - The Company's processing costs consist of expenses related
to processing transactions, servicing customers and merchants and cost of goods
sold related to hardware and other product sales.

•Service fees - The Company incurs costs from third-party networks utilized to
deliver payment solutions. Additionally, other third-parties are utilized in
performing services directly related to generating revenue.

•Provision for credit losses - Changes in the reserve for credit loss are the result of changes in management's estimate of the losses in the Company's outstanding portfolio of receivables, including losses from fraud.

•Operating interest - The Company incurs interest expense on the operating debt obtained to provide liquidity for its short-term receivables or used for investing purposes in fixed income debt securities.



•Depreciation and amortization - The Company has identified those tangible and
intangible assets directly associated with providing a service that generates
revenue and records the depreciation and amortization associated with those
assets under this category. Such assets include processing platforms and related
infrastructure, acquired developed technology intangible assets and other
similar asset types.

Other Operating Expenses



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

•Sales and marketing - The Company's sales and marketing expenses relate primarily to compensation, benefits, sales commissions and related expenses for sales, marketing and other related activities.



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


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Fleet Solutions

Revenues

The following table reflects comparative revenue and key operating statistics
within Fleet Solutions:

                                                           Three Months Ended March 31,                       Increase (Decrease)
(In thousands, except per gallon data)                       2022                   2021                   Amount                Percent
Revenues1
Payment processing revenue                            $       151,906          $   110,576          $          41,330                 37  %
Account servicing revenue                                      42,443               39,991                      2,452                  6  %
Finance fee revenue                                            78,405               51,840                     26,565                 51  %
Other revenue                                                  46,385               41,430                      4,955                 12  %
Total revenues                                        $       319,139          $   243,837          $          75,302                 31  %

Key operating statistics
Payment processing revenue:
Fuel transactions processed2                                  161,289              146,400                     14,889                 10  %

Payment processing transactions3                              132,663              118,389                     14,274                 12  %
Payment processing $ of fuel4                         $    14,390,257          $ 9,176,960          $       5,213,297                 57  %
Average price per gallon of fuel - Domestic -
($USD/gal)                                            $          3.95          $      2.72          $            1.23                 45  %
Net payment processing rate5                                     1.06  %              1.20  %                   (0.14) %             (12) %
Net late fee rate6                                               0.44  %              0.45  %                   (0.01) %              (2) %



1 The impact of foreign currency exchange rate fluctuations on Fleet Solutions
decreased revenue by $2.1 million in the first quarter of 2022 as compared to
the same period in the prior year. Favorable impact from domestic fuel prices
resulted in an increase of $41.1 million in revenue for the three months ended
March 31, 2022, as compared to the same period in the prior year.

2 Fuel transactions processed represents the total number of fuel transactions (funded and unfunded) made by fleets.



3 Payment processing transactions represents the total number of purchases made
by fleets that have a payment processing relationship with WEX where the Company
maintains the receivable for the total purchase.

4 Payment processing $ of fuel represents the total dollar value of the fuel purchased by fleets that have a payment processing relationship with WEX.



5 Net payment processing rate represents the percentage of the dollar value of
each payment processing transaction that WEX records as revenue from merchants
less certain discounts given to customers and network fees. The increase in fuel
prices has resulted in a decline in our net payment processing rate for the
three months ended March 31, 2022, as compared to the same period in the prior
year.

6 Net late fee rate represents late fee revenue as a percentage of fuel purchased by fleets that have a payment processing relationship with WEX.



Fleet Solutions revenue increased $75.3 million for the first quarter of 2022 as
compared to the same period in the prior year. Revenues were favorably impacted
by higher domestic fuel prices and increased volumes in North America.

Finance fee revenue is comprised of the following components:



                                                             Three Months Ended March 31,               Increase (Decrease)
(In thousands)                                                  2022              2021              Amount              Percent
Finance income                                              $  63,110          $ 41,150          $   21,960                   53  %
Factoring fee revenue                                          15,295            10,690               4,605                   43  %
Finance fee revenue                                         $  78,405          $ 51,840          $   26,565                   51  %


Finance income primarily consists of late fees charged for receivables not paid
within the terms of the customer agreement based upon the outstanding customer
receivable balance. This revenue is earned when a customer's receivable balance
becomes delinquent and is calculated using the greater of a minimum charge or a
stated late fee rate multiplied by the outstanding balance that is subject to a
late fee charge. Changes in the absolute amount of such outstanding balances can
be attributed to: (i) changes in fuel prices; (ii) customer specific transaction
volume; and (iii) customer specific delinquencies. Late fee revenue can also be
impacted by: (i) changes in late fee rates; and, (ii) increases or decreases in
customer overdue balances. Late fee rates are determined and set based primarily
on the risk associated with our customers, coupled with a strategic view of
standard rates within our industry. Periodically, we assess the market rates
associated within our industry to determine appropriate late fee rates. We
consider factors such as the Company's overall financial model and strategic
plan, the cost to our
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business from customers failing to pay timely and the impact such late payments have on our financial results. These assessments are typically conducted at least annually but may occur more often depending on macro-economic factors.



Finance income increased $22.0 million for the first quarter of 2022 as compared
to the same period in the prior year primarily as a result of higher domestic
fuel prices, increased volumes and instances of late fees. Concessions to
certain customers experiencing financial difficulties may be granted and are
limited to extending the time to pay, placing a customer on a payment plan or
granting waivers of late fees. There were no material concessions granted to
customers experiencing financial difficulties during the three months ended
March 31, 2022 and 2021.

The primary source of factoring fee revenue is calculated as a negotiated
percentage fee of the receivable balance that we purchase. A secondary source of
factoring fee revenue is a flat rate service fee to our customers that request a
non-contractual same day funding of the receivable balance. Factoring fee
revenue increased $4.6 million for the first quarter of 2022, as compared with
the same period in the prior year due to increased shipping demand, leading to
an increase in the size and volume of factored invoices.

Operating Expenses



The following table compares line items within operating income and presents
segment adjusted operating income and segment adjusted operating income margin
for Fleet Solutions:

                                                                   Three Months Ended March 31,                   Increase (Decrease)
(In thousands)                                                        2022                  2021              Amount              Percent
Cost of services
Processing costs                                               $       60,062           $  52,192          $   7,870                   15  %
Service fees                                                   $        2,156           $   1,728          $     428                   25  %
Provision for credit losses                                    $       23,224           $   4,364          $  18,860                  432  %
Operating interest                                             $        1,461           $   2,109          $    (648)                 (31) %
Depreciation and amortization                                  $       11,837           $  12,715          $    (878)                  (7) %

Other operating expenses
General and administrative                                     $       23,667           $  20,502          $   3,165                   15  %
Sales and marketing                                            $       49,441           $  41,025          $   8,416                   21  %
Depreciation and amortization                                  $       18,900           $  19,585          $    (685)                  (3) %

Operating income                                               $      128,391           $  89,617          $  38,774                   43  %

Segment adjusted operating income1                             $      160,101           $ 118,258          $  41,843                   35  %
Segment adjusted operating income margin2                                  50   %              48  %               2   %                4  %


1 Our CODM evaluates the financial performance of each segment using segment
adjusted operating income, which excludes: (i) unallocated corporate expenses;
(ii) acquisition-related intangible amortization and other acquisition and
divestiture related items; (iii) debt restructuring costs; (iv) stock-based
compensation; and (v) other costs. See "Non-GAAP Financial Measures That
Supplement GAAP Measures" later in this Item 2 for a reconciliation of total
segment adjusted operating income to income before income taxes. See also Item 1
- Note 17, Segment Information, of our condensed consolidated financial
statements for more information regarding our segment determination.

2 Segment adjusted operating income margin is calculated by dividing segment
adjusted operating income by segment revenue. The 2022 increase in segment
adjusted operating income margin reflects revenue growth, higher fuel prices and
operating leverage in the expense base.


Cost of services



Processing costs increased by $7.9 million for the three months ended March 31,
2022, as compared with the same period in the prior year. Such increase was
primarily driven by higher compliance costs and, in part, by business support
costs incurred as a result of the increased volumes experienced during the
quarter ended March 31, 2022 as compared to the prior year comparable period.
The Company is expecting the higher compliance costs to continue at least
through the end of fiscal year 2022.

Provision for credit losses increased by $18.9 million for the first quarter of
2022 as compared to the same period in the prior year. The increase in the
provision for credit losses during the first quarter of 2022 is reflective of
higher PPG rates and loss rates trending toward more historical norms. We
generally measure our credit loss performance by calculating fuel-
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related credit losses as a percentage of total fuel expenditures on payment processing transactions. This metric for credit losses was 15.0 and 6.2 basis points of fuel expenditures for the three months ended March 31, 2022 and 2021, respectively.



Service fees, operating interest and depreciation and amortization expense for
the three months ended March 31, 2022 were all generally consistent with those
from the same period in the prior year.

Other operating expenses



General and administrative expenses increased $3.2 million for the three months
ended March 31, 2022, as compared with the same period in the prior year due to
increased professional services, information technology and compensation expense
in support of business growth.

Sales and marketing expenses increased $8.4 million for the three months ended
March 31, 2022, as compared with the same period in the prior year. This
increase was primarily driven by higher partner commissions due to volume
growth, coupled to a lesser extent with increased compensation and marketing
expense in support of that growth.

Depreciation and amortization expense for the first quarter of 2022 was generally consistent with the same period in the prior year.

Travel and Corporate Solutions

Revenues

The following table reflects comparative revenue and key operating statistics within Travel and Corporate Solutions:



                                                             Three Months Ended March 31,                     Increase (Decrease)
(In thousands)                                                 2022                   2021                Amount              Percent
Revenues1
Payment processing revenue                              $        65,075          $    57,248          $   7,827                     14  %
Account servicing revenue                                        10,758               10,687                 71                      1  %
Finance fee revenue                                                 141                  294               (153)                   (52) %
Other revenue                                                     1,277                2,413             (1,136)                   (47) %
Total revenues                                          $        77,251          $    70,642          $   6,609                      9  %


Key operating statistics
Payment processing revenue:
Purchase volume2                                        $    11,809,450          $ 6,107,675            $5,701,775                  93  %
Net interchange rate3                                              0.55  %              0.94  %           (0.39)   %               (41) %


1 The impact of foreign currency exchange rate fluctuations on Travel and Corporate Solutions decreased revenues by an immaterial amount during the three months ended March 31, 2022, compared to the prior year comparable period.

2 Purchase volume represents the total dollar value of all WEX-issued transactions that use WEX corporate card products and virtual card products.



3 Net interchange rate represents the percentage of the dollar value of each
payment processing transaction that WEX records as revenue from merchants, less
certain discounts given to customers and network fees.

Travel and Corporate Solutions revenue increased $6.6 million for the first
quarter of 2022, as compared to the same period in the prior year. The increase
was primarily driven by an increase in travel-related volumes both
internationally and domestically and continued strength in the partner channel.
These revenue increases were in part offset by the impact of an accounting
change in the fourth quarter of 2021, which required a shift from gross revenue
presentation to net revenue presentation for one customer.

Concessions to certain customers experiencing financial difficulties may be
granted and are limited to extending the time to pay, placing a customer on a
payment plan or granting waivers of late fees. There were no material
concessions granted to customers during the three months ended March 31, 2022
and 2021.
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Operating Expenses

The following table compares line items within operating income (loss) and presents segment adjusted operating income and segment adjusted operating income margin for Travel and Corporate Solutions:



                                                               Three Months Ended March 31,                   Increase (Decrease)
(In thousands)                                                   2022                  2021               Amount              Percent
Cost of services
Processing costs                                           $      18,700           $  16,821          $    1,879                    11  %
Service fees                                               $       3,789           $   3,864          $      (75)                   (2) %
Provision for credit losses                                $       2,147           $     635          $    1,512                   238  %
Operating interest                                         $         750           $     515          $      235                    46  %
Depreciation and amortization                              $       4,536           $   7,611          $   (3,075)                  (40) %

Other operating expenses
General and administrative                                 $      15,342           $  31,567          $  (16,225)                  (51) %
Sales and marketing                                        $      13,068           $  28,983          $  (15,915)                  (55) %
Depreciation and amortization                              $       6,289           $   6,466          $     (177)                   (3) %

Operating income (loss)                                    $      12,630           $ (25,820)         $   38,450                  (149) %

Segment adjusted operating income1                         $      28,330           $   7,015          $   21,315                   304  %
Segment adjusted operating income margin2                             37   %              10  %               27   %               270  %


1 Our CODM evaluates the financial performance of each segment using segment
adjusted operating income, which excludes: (i) unallocated corporate expenses;
(ii) acquisition-related intangible amortization and other acquisition and
divestiture related items; (iii) debt restructuring costs; (iv) stock-based
compensation; and (v) other costs. See "Non-GAAP Financial Measures That
Supplement GAAP Measures" later in this Item 2 for a reconciliation of total
segment adjusted operating income to income before income taxes. See also Item 1
- Note 17, Segment Information, of our condensed consolidated financial
statements for more information regarding our segment determination.

2 Segment adjusted operating income margin is calculated by dividing segment
adjusted operating income by segment revenue. The 2022 increase in segment
adjusted operating income margin reflects additional benefits from eNett and
Optal synergies and scale from increased revenue.

Cost of services

Processing costs for the three months ended March 31, 2022 increased $1.9 million from the same period in the prior year, partly in support of the segment's growth in revenue and partly from higher compliance costs.

Provision for credit losses increased $1.5 million for the first quarter of 2022, as compared to the same period in the prior year primarily due to volume growth.



Depreciation and amortization expense for the three months ended March 31, 2022
decreased $3.1 million as compared to the same period in the prior year,
primarily due to the prior year amortization of developed technology intangible
assets with a one-year life that were acquired as part of the eNett and Optal
acquisition.

Service fees and operating interest for the three months ended March 31, 2022 remained relatively consistent with the comparable prior year period.

Other operating expenses



General and administrative expenses for the first quarter of 2022 decreased by
$16.2 million, as compared to the same period in the prior year. The decrease
was primarily due to a vendor contract termination payment during the first
quarter of 2021 and decreased compensation as a result of the integration of
eNett and Optal during the year ended December 31, 2021.

Sales and marketing expenses decreased for the first quarter of 2022 by $15.9
million, as compared to the same period in the prior year. This decrease was
primarily due to a reduction in partner commissions as a result of the impact of
an accounting change in the fourth quarter of 2021, which required a shift from
gross revenue presentation to net revenue presentation for one customer.
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Depreciation and amortization expense during the first quarter of 2022 remained consistent with the same period in the prior year.

Health and Employee Benefit Solutions

Revenues

The following table reflects comparative revenue and key operating statistics within Health and Employee Benefit Solutions:



                                                                   Three Months Ended March 31,                      Increase (Decrease)
(In thousands)                                                      2022                      2021               Amount              Percent
Revenues
Payment processing revenue                                 $        22,497               $    20,565          $    1,932                   9  %
Account servicing revenue                                           86,740                    67,945              18,795                  28  %
Finance fee revenue                                                     36                        19                  17                  89  %
Other revenue                                                       11,872                     7,749               4,123                  53  %
Total revenues                                             $       121,145               $    96,278          $   24,867                  26  %

Key operating statistics
Payment processing revenue:
Purchase volume1                                           $     1,630,218               $ 1,484,226          $  145,992                  10  %
Account servicing revenue:
Average number of SaaS accounts2                                    17,847                    15,513               2,334                  15  %



1 Purchase volume represents the total U.S. dollar value of all transactions where interchange is earned by WEX.

2 Average number of SaaS accounts represents the number of active Consumer-Directed Health, COBRA, and billing accounts on our SaaS platforms in the U.S.



Payment processing revenue increased $1.9 million during the first quarter of
2022 as compared to the same period in the prior year due to cardholder growth
and increased cardholder spend volumes.

Account servicing revenue increased $18.8 million for the first quarter of 2022,
as compared to the same period in the prior year. The increase is primarily due
to increased revenues recognized as a result of the benefitexpress Acquisition
along with account growth and increased participants.

Finance fee revenue was not material to Health and Employee Benefit Solutions' operations for the three months ended March 31, 2022 and 2021.



Other revenue increased $4.1 million for the first quarter of 2022, as compared
to the same period in the prior year. The increase was due primarily to interest
revenues earned on the investment of HSA deposits obtained as a result of the
April 2021 acquisition of contractual rights to serve as custodian to certain
HSAs from Bell Bank.


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Operating Expenses



The following table compares line items within operating income and presents
segment adjusted operating income and segment adjusted operating income margin
for Health and Employee Benefit Solutions:

                                                               Three Months Ended March 31,                  Increase (Decrease)
(In thousands)                                                    2022                 2021              Amount              Percent
Cost of services
Processing costs                                            $      53,745           $ 40,749          $  12,996                   32  %
Service fees                                                $       9,805           $  5,554          $   4,251                   77  %
Provision for credit losses                                 $         269           $     60          $     209                  348  %
Operating interest                                          $          89           $      -          $      89                      NM
Depreciation and amortization                               $       9,629           $  8,868          $     761                    9  %

Other operating expenses
General and administrative                                  $       9,235           $  7,375          $   1,860                   25  %
Sales and marketing                                         $      11,436           $  8,339          $   3,097                   37  %
Depreciation and amortization                               $      14,743           $ 11,063          $   3,680                   33  %

Operating income                                            $      12,194           $ 14,270          $  (2,076)                 (15) %

Segment adjusted operating income1                          $      35,500           $ 30,544          $   4,956                   16  %
Segment adjusted operating income margin2                              29   %             32  %              (3)  %               (9) %


NM - Not meaningful

1 Our CODM evaluates the financial performance of each segment using segment
adjusted operating income, which excludes: (i) unallocated corporate expenses;
(ii) acquisition-related intangible amortization and other acquisition and
divestiture related items; (iii) debt restructuring costs; (iv) stock-based
compensation; and (v) other costs. See "Non-GAAP Financial Measures That
Supplement GAAP Measures" later in this Item 2 for a reconciliation of total
segment adjusted operating income to income before income taxes. See also Item 1
- Note 17, Segment Information, of our condensed consolidated financial
statements for more information regarding our segment determination.

2 Segment adjusted operating income margin is calculated by dividing segment
adjusted operating income by segment revenue. The 2022 decrease in segment
adjusted operating income margin reflects the benefitexpress Acquisition in June
2021.

Cost of services

Processing costs increased $13.0 million for the first quarter of 2022, as
compared to the same period in the prior year. The increase in processing costs
for the first quarter of 2022 primarily resulted from increased costs as a
result of the benefitexpress Acquisition along with higher customer service and
technology costs to support partner growth.

Service fees for the three months ended March 31, 2022 increased $4.3 million,
as compared with the same period in the prior year. This increase was driven in
part by the benefitexpress Acquisition and a growth in revenue volumes.

Provision for credit losses and operating interest were not material to Health
and Employee Benefit Solutions' operations for the three months ended March 31,
2022 and 2021.

Depreciation and amortization expense for the first quarter of 2022 remained consistent with the same period in the prior year.

Other operating expenses

General and administrative expenses increased $1.9 million for the first quarter 2022, as compared to the same period in the prior year. The increase was primarily due to the benefitexpress Acquisition.



Sales and marketing expenses in the first quarter of 2022 increased $3.1 million
as compared to the same period in the prior year due to the general expansion of
the sales and marketing team and the benefitexpress Acquisition.

Depreciation and amortization expense increased $3.7 million for the three
months ended March 31, 2022, as compared to the same period of the prior year
primarily due to the amortization of intangible rights obtained as a result of
the April 2021 acquisition of contractual rights to serve as custodian of
certain HSAs.
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Unallocated corporate expenses



Unallocated corporate expenses represent the portion of expenses relating to
general corporate functions, including acquisition and divestiture expenses,
certain finance, legal, information technology, human resources, administrative
and executive expenses and other expenses not directly attributable to a
reportable segment.

The following table compares line items within operating income for unallocated
corporate expenses:

                                                               Three Months Ended March 31,               Increase (Decrease)
(In thousands)                                                    2022              2021               Amount              Percent
Other operating expenses
General and administrative                                    $  30,419          $ 26,987          $     3,432                  13  %
Depreciation and amortization                                 $     522          $    539          $       (17)                 (3) %


General and administrative expenses increased $3.4 million for the first quarter
of 2022, as compared to the same period in the prior year. The increase in
expense for the first quarter of 2022 was due primarily to increased
compensation-related costs and, to a lesser extent, fees for professional
services incurred in connection with the Company's Investor Day held during the
first quarter of 2022.

Unallocated depreciation and amortization for the three months ended March 31, 2022 was comparable to the same period in the prior year.

Non-operating income and expense



The following table reflects comparative results for certain amounts excluded
from operating income:

                                                                     Three Months Ended March 31,                   Increase (Decrease)
(In thousands)                                                          2022                  2021              Amount              Percent
Financing interest expense                                       $       (29,689)         $ (33,284)         $   (3,595)                (11) %
Change in fair value of contingent consideration                 $       (16,600)         $       -          $   16,600                     NM

Net foreign currency gain (loss)                                 $         5,006          $  (2,755)         $    7,761                     NM
Net unrealized gain on financial instruments                     $        49,827          $   7,033          $   42,794                 608  %
Income tax provision (benefit)                                   $        42,032          $  (1,670)         $   43,702                     NM
Net income from non-controlling interests                        $           268          $     726          $     (458)                (63) %
Change in value of redeemable non-controlling interest           $        34,245          $ (25,044)         $   59,289                     NM


NM - Not Meaningful

Financing interest expense decreased $3.6 million for the first quarter of 2022,
as compared to the same period in the prior year primarily due to the early
redemption of the Company's $400 million senior notes with a fixed rate of 4.75%
during March 2021.

During the three months ended March 31, 2022, the Company's contingent consideration derivative liability increased as a result of the steepening of the Federal Funds futures curve. See Note 12, Fair Value, for further information on the valuation of this derivative liability.



Our foreign currency exchange exposure is primarily related to the remeasurement
of our cash, receivable and payable balances, including intercompany
transactions that are denominated in foreign currencies. The Company incurred
net foreign currency gains of $5.0 million in the first quarter of 2022. The
gains resulted from the strengthening of foreign currencies relative to the U.S.
dollar. The Company's net foreign currency losses for the three months ended
March 31, 2021 resulted from the remeasurement of assets and liabilities, and
losses on intercompany transactions, resulting from the U.S. dollar
strengthening relative to numerous major foreign currencies in which we
transact.

The Company incurred unrealized gains on financial instruments of $49.8 million
in the first quarter of 2022 due to significant increases in the LIBOR forward
yield curve, coupled with a decrease in remaining future settlements. The net
unrealized gain on financial instruments for the first quarter of 2021 resulted
primarily from a reduction in the fair value of
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interest rate swap liabilities due to a decrease in the remaining future settlements, coupled with an increase in the LIBOR forward yield curve.



The Company's effective tax rate was 32.1 percent for the three months ended
March 31, 2022, as compared to (7.8) percent for the three months ended March
31, 2021. Income tax expense is based on an estimated annual effective rate,
which requires the Company to make its best estimate of annual pretax income or
loss. The Company's effective tax rate for the three months ended March 31, 2022
was adversely impacted by a discrete tax item of $7.5 million primarily
associated with an uncertain tax position. Effective tax rates were
significantly lower for the same period in the prior year primarily due to
significant excess tax benefits arising from stock-based compensation in the
prior year.

Net income from non-controlling interests were not material to Company operations for the three months ended March 31, 2022 and 2021.

During the three months ended March 31, 2022, the Company purchased the remaining non-controlling interest in PO Holding from SBI, reducing the carrying value of the redeemable non-controlling interest to zero. The transaction resulted in a $34.2 million gain, net of tax expense. See "Summary - Recent Events" earlier in this Item 2 for more information.

Non-GAAP Financial Measures That Supplement GAAP Measures



In addition to evaluating the Company's performance on a GAAP basis, the CODM of
the Company uses segment adjusted operating income, a non-GAAP measure, to
allocate resources among our operating segments. The Company considers this
measure, which excludes unallocated corporate expenses, acquisition-related
intangible amortization, other acquisition and divestiture related items, debt
restructuring costs, stock-based compensation and other costs integral in
evaluating the Company's performance.

WEX believes that adjusted net income, another non-GAAP measure that similarly
excludes all items discussed in the paragraph above except unallocated corporate
expenses, and further excludes unrealized gains and losses on financial
instruments, net foreign currency gains and losses, change in fair value of
contingent consideration, debt issuance cost amortization, other adjustments
attributable to non-controlling interests, and tax related items, is also
integral to the Company's reporting and planning processes.

Segment adjusted operating income and adjusted net income may be useful to
investors as a means of evaluating our performance. However, because segment
adjusted operating income and adjusted net income are non-GAAP measures, they
should not be considered as a substitute for, or superior to, operating income
or net income as determined in accordance with GAAP. Segment adjusted operating
income and adjusted net income as used by WEX may not be comparable to similarly
titled measures employed by other companies.

Specifically, in addition to evaluating the Company's performance on a GAAP basis, management evaluates the Company's performance on a basis that excludes the above items because:



•Exclusion of the non-cash, mark-to-market adjustments on financial instruments,
including interest rate swap agreements and investment securities, helps
management identify and assess trends in the Company's underlying business that
might otherwise be obscured due to quarterly non-cash earnings fluctuations
associated with these financial instruments. Additionally, the non-cash,
mark-to-market adjustments on financial instruments are difficult to forecast
accurately, making comparisons across historical and future quarters difficult
to evaluate;

•Net foreign currency gains and losses primarily result from the remeasurement
to functional currency of cash, accounts receivable and accounts payable
balances, certain intercompany notes denominated in foreign currencies and any
gain or loss on foreign currency hedges relating to these items. The exclusion
of these items helps management compare changes in operating results between
periods that might otherwise be obscured due to currency fluctuations;

•The change in fair value of contingent consideration, which is related to the
acquisition of certain contractual rights to serve as custodian or sub-custodian
to HSAs, is dependent upon changes in future interest rate assumptions and has
no significant impact on the ongoing operations of the Company. Additionally,
the non-cash, mark-to-market adjustments on financial instruments are difficult
to forecast accurately, making comparisons across historical and future quarters
difficult to evaluate;

•The Company considers certain acquisition-related costs, including certain
financing costs, investment banking fees, warranty and indemnity insurance,
certain integration-related expenses and amortization of acquired intangibles,
as
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well as gains and losses from divestitures to be unpredictable, dependent on
factors that may be outside of our control and unrelated to the continuing
operations of the acquired or divested business or the Company. In addition, the
size and complexity of an acquisition, which often drives the magnitude of
acquisition-related costs, may not be indicative of such future costs. The
Company believes that excluding acquisition-related costs and gains or losses on
divestitures facilitates the comparison of our financial results to the
Company's historical operating results and to other companies in our industry;

•Stock-based compensation is different from other forms of compensation, as it
is a non-cash expense. For example, a cash salary generally has a fixed and
unvarying cash cost. In contrast, the expense associated with an equity-based
award is generally unrelated to the amount of cash ultimately received by the
employee, and the cost to the Company is based on a stock-based compensation
valuation methodology and underlying assumptions that may vary over time;

•Other costs are not consistently occurring and do not reflect expected future
operating expense, nor do they provide insight into the fundamentals of current
or past operations of our business. This also includes costs related to certain
identified initiatives, including technology initiatives, to further streamline
the business, improve the Company's efficiency, create synergies, and globalize
the Company's operations, all with an objective to improve scale and efficiency
and increase profitability going forward. For the three months ended March 31,
2021, other costs additionally include a penalty incurred on a vendor contract
termination;

•Debt restructuring and debt issuance cost amortization are unrelated to the
continuing operations of the Company. Debt restructuring costs are not
consistently occurring and do not reflect expected future operating expense, nor
do they provide insight into the fundamentals of current or past operations of
our business. In addition, since debt issuance cost amortization is dependent
upon the financing method, which can vary widely company to company, we believe
that excluding these costs helps to facilitate comparison to historical results
as well as to other companies within our industry;

•The adjustments attributable to non-controlling interests, including adjustments to the redemption value of a non-controlling interest, have no significant impact on the ongoing operations of the business;



•The tax related items are the difference between the Company's GAAP tax
provision and a pro forma tax provision based upon the Company's adjusted net
income before taxes as well as the impact from certain discrete tax items. The
methodology utilized for calculating the Company's adjusted net income tax
provision is the same methodology utilized in calculating the Company's GAAP tax
provision; and

•The Company does not allocate certain corporate expenses to our operating segments, as these items are centrally controlled and are not directly attributable to any reportable segment.

The following table reconciles net income (loss) attributable to shareholders to adjusted net income attributable to shareholders:



                                                                          Three Months Ended March 31,
(In thousands)                                                              2022                2021
Net income (loss) attributable to shareholders                          $  122,763          $  (2,565)
Unrealized gain on financial instruments                                   (49,827)            (7,033)
Net foreign currency (gain) loss                                            (5,006)             2,755

Change in fair value of contingent consideration                            16,600                  -
Acquisition-related intangible amortization                                 42,719             42,454
Other acquisition and divestiture related items                              4,540             14,796

Stock-based compensation                                                    25,220             18,943
Other costs                                                                  8,179             12,237

Debt restructuring and debt issuance cost amortization                       3,279              5,092

ANI adjustments attributable to non-controlling interests                  (34,587)            23,800
Tax related items                                                           (2,825)           (29,205)
Adjusted net income attributable to shareholders                        $  

131,055 $ 81,274

The following table reconciles total segment adjusted operating income to income before income taxes:


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                                                                                Three Months Ended March 31,
(In thousands)                                                                    2022                   2021
Segment adjusted operating income
Fleet Solutions                                                            $       160,101          $   118,258
Travel and Corporate Solutions                                                      28,330                7,015
Health and Employee Benefit Solutions                                               35,500               30,544
Total segment adjusted operating income                                    

$ 223,931 $ 155,817

Reconciliation:


Total segment adjusted operating income                                    $       223,931          $   155,817
Less:
Unallocated corporate expenses                                                      21,011               16,209
Acquisition-related intangible amortization                                         42,719               42,454
Other acquisition and divestiture related items                                      4,540               14,796
Debt restructuring costs                                                               (12)                 637
Stock-based compensation                                                            25,220               18,943
Other costs                                                                          8,179               12,237

Operating income                                                                   122,274               50,541
Financing interest expense                                                         (29,689)             (33,284)
Net foreign currency gain (loss)                                                     5,006               (2,755)

Change in fair value of contingent consideration                                   (16,600)                   -
Net unrealized gain on financial instruments                                        49,827                7,033
Income before income taxes                                                 $       130,818          $    21,535

Liquidity and Capital Resources



We fund our business operations primarily via cash on hand, cash generated from
operations, the issuance of deposits, borrowings under our Amended and Restated
Credit Agreement, our participation debt and our accounts receivable factoring
and securitization arrangements. As of March 31, 2022, we had cash and cash
equivalents of $577.5 million and remaining borrowing availability of $698.3
million under the revolving credit facility provided by our Amended and Restated
Credit Agreement along with access to various sources of funds, including
uncommitted federal funds lines of credit from other banks.

Our Amended and Restated Credit Agreement provides for a secured revolving
credit facility (the "Revolving Credit Facility"), senior secured tranche A term
loans (the "Tranche A Term Loans") and senior secured tranche B term loans (the
"Tranche B Term Loans"). As of March 31, 2022, the Company had an outstanding
principal amount of $929.5 million on the Tranche A Term Loans, an outstanding
principal amount of $1,427.6 million on the Tranche B Term Loans, borrowings of
$180.3 million on the Revolving Credit Facility and letters of credit of $51.4
million drawn against the Revolving Credit Facility.

As of March 31, 2022, the Company had outstanding $310.0 million in aggregate
principal amount of Convertible Notes, issued in a private placement with
Warburg Pincus. At the Company's option, interest is either payable in cash,
through accretion to the principal amount of the Convertible Notes, or a
combination of cash and accretion. The Company has paid, and expects to continue
to pay interest in cash as it comes due.

The Company is also party to two securitized debt agreements. Under these
agreements, our subsidiaries sell trade accounts receivable to bankruptcy-remote
subsidiaries consolidated by the Company, which in turn use the receivables as
collateral to issue asset-backed commercial paper. Amounts collected on the
securitized receivables are restricted to pay the securitized debt and are not
available for general corporate purposes. The Company had $104.2 million of
securitized debt under these facilities as of March 31, 2022. In addition, from
time to time, WEX Bank enters into participation agreements with third-party
banks to fund customers' balances that exceed WEX Bank's lending limit to
individual customers. There was $31.1 million borrowed against these
participation agreements as of March 31, 2022. WEX Bank also borrows from
uncommitted federal funds lines to supplement the financing of the Company's
accounts receivable. There were no outstanding borrowings under these lines of
credit as of March 31, 2022. See Part I - Item 1 - Note 9, Financing and Other
Debt, in this report for more information regarding these facilities.
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We utilize two off-balance sheet factoring arrangements to sell certain of our
accounts receivable to unrelated third-party financial institutions in order to
accelerate the collection of the Company's cash and reduce internal costs. Under
the arrangements, the factored receivables have been transferred without
recourse. Available capacity is dependent on the level of our trade accounts
receivable eligible to be sold and the financial institution's willingness to
purchase such receivables. However, the Company is not dependent on them to
maintain its liquidity and capital resources. We are not aware of any
circumstances that are reasonably likely to cause the off-balance sheet
arrangements to have a material adverse effect on liquidity and capital
resources. See Part I - Item 1 - Note 10, Off-Balance Sheet Arrangements, in
this report for further information about the Company's off-balance sheet
arrangements.

WEX Bank's regulatory status enables it to raise capital to fund the Company's
working capital requirements by issuing deposits, subject to FDIC rules
governing minimum financial ratios. As of March 31, 2022, we had $2,875.7
million in deposits. See Part I - Item 1 - Note 8, Deposits, in this report for
more information regarding our deposits.

We believe that our current cash and cash equivalents, cash generating
capabilities, financial condition and operations, and access to available
funding sources will be adequate to fund our cash needs for the next 12 months
and the foreseeable future. The table below summarizes our primary sources and
uses of cash:

Sources of cash                                         Uses of cash1
•Borrowings and availability on our Amended and         •Payments on our Amended and Restated Credit
Restated Credit Agreement                               Agreement
•Convertible Notes                                      •Payments on maturities and withdrawals of
•Deposits                                               deposits
•Borrowed federal funds                                 •Payments on borrowed federal funds
•Participation debt                                     •Working capital needs of the business
•Accounts receivable factoring and securitization       •Capital expenditures
arrangements


1 Our long-term cash requirements consist primarily of amounts owed on our Amended and Restated Credit Agreement and various facilities lease agreements.

Cash Flows

The table below summarizes our cash activities:


                                                                      Three Months Ended March 31,
(In thousands)                                                          2022                  2021
Cash flows used for operating activities                         $      (161,030)         $ (217,295)
Cash flows used for investing activities                         $      (106,563)         $  (16,406)
Cash flows provided by (used for) financing activities           $       262,517          $ (114,579)


Operating Activities

We fund a customer's entire receivable as part of our fleet and certain of our
travel payment processing transactions, while the revenue generated by these
transactions is only a small percentage of that amount. Consequently, cash flows
from operations are impacted significantly by increases or decreases in fuel
prices, driving changes in accounts receivable and accounts payable balances,
which directly impact our capital resource requirements.

Cash used for operating activities for the three months ended March 31, 2022
decreased $56.3 million as compared to the same period in the prior year. The
decrease in cash used for operating activities year over year is primarily the
result of higher net income adjusted for non-cash items, offset in part by an
increase in the net change in operating assets and liabilities due to increases
in fuel prices.

Investing Activities

Investing cash flows generally consist of capital expenditures, cash used for
acquisitions and the investment of eligible custodial cash assets previously
held by third-party depository partners, transferred to our WEX Bank depository
partner.

Cash used for investing activities for the three months ended March 31, 2022
increased $90.2 million as compared to the same period in the prior year,
primarily resulting from the investment of $97.6 million of transferred HSA
deposits in available-for-sale debt securities, partially offset by maturities
of $15.3 million.

Financing Activities

Financing cash flows generally consist of the issuance and repayment of debt and deposits and proceeds from employee exercises of stock options.


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Cash provided by financing activities for the three months ended March 31, 2022
totaled $262.5 million, due primarily to an increase in deposits of
$197.5 million and net borrowings of $60.5 million on the Revolving Credit
Facility. Cash used for financing activities for the three months ended March
31, 2021 totaled $114.6 million due primarily to the early redemption of the
Company's $400.0 million of Notes, which was funded by cash on-hand. This use of
cash was partly offset by federal fund borrowings of $194.8 million and an
increase in deposits of $103.0 million.

Financial Covenants



The Amended and Restated Credit Agreement contains customary affirmative and
negative covenants affecting the Company and its subsidiaries, including
covenants limiting the Company's ability to, among other things, incur debt
(including disqualified stock), grant liens, make certain investments, pay
dividends, repurchase equity interests and sell assets, subject to certain
exceptions. The Amended and Restated Credit Agreement also contains customary
financial maintenance covenants, including a consolidated interest coverage
ratio and a consolidated leverage ratio. The indenture associated with the
Convertible Notes also includes customary covenants, including a debt incurrence
covenant that restricts the Company from incurring certain indebtedness,
including disqualified stock and preferred stock issued by the Company or its
subsidiaries, subject to customary exceptions. At March 31, 2022, we were in
compliance with such covenants. See Part II - Item 7, Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources and Part II - Item 8 - Note 16, Financing and Other Debt, in
our Annual Report on Form 10-K for the year ended December 31, 2021 for more
information regarding these covenants.

Undistributed Earnings



Undistributed earnings of certain foreign subsidiaries of the Company amounted
to an estimated $146.0 million and $133.0 million as of March 31, 2022 and
December 31, 2021, respectively. The Company continues to maintain its
indefinite reinvestment assertion for its investments in foreign subsidiaries
except for any historical undistributed earnings and future earnings for WEX
Australia. Upon distribution of the foreign subsidiaries' earnings in which the
Company continues to assert indefinite reinvestment, the Company would be
subject to withholding taxes payable to foreign countries, where applicable, but
would generally have no further federal income tax liability. It is not
practicable to estimate the unrecognized deferred tax liability, however, it is
not expected to be material.

Other Commitments, Contingencies and Contractual Obligations



Certain of the Company's subsidiaries are required to purchase a minimum amount
of fuel from suppliers on an annual basis. If the minimum requirement is not
fulfilled, they are subject to penalties based on the amount of spend below the
minimum annual volume commitment. The Company incurred shortfall penalties of
$1.3 million and $1.5 million during the three months ended March 31, 2022 and
2021, respectively.

On March 7, 2022, WEX Inc. and SBI entered into a Share Purchase Agreement
whereby SBI sold, and WEX Inc. purchased, SBI's remaining 4.53 percent interest
in PO Holding for a purchase price of $234.0 million plus any interest accruing
pursuant to the terms of the Share Purchase Agreement. The purchase price is
payable in three installments of $76.7 million in each of March of 2024, 2025
and 2026, with a final payment of $4.0 million payable in March 2026. Pursuant
to the Share Purchase Agreement, WEX Inc. owes SBI interest on the outstanding
purchase price balance from March 2024 to March 2025 at the 12-month SOFR rate
(as determined on March 1, 2024) plus 1.25 percent and on the outstanding
balance from March 2025 to March 2026 at the 12-month SOFR rate (as determined
on March 3, 2025) plus 2.25 percent, except that no interest accrues on the $4.0
million payment due in March 2026. The carrying value of the redeemable
non-controlling interest as of the acquisition date was $254.4 million and was
reduced to zero as a result of the acquisition. Additionally, the Company
recorded a $216.6 million deferred liability and a $34.2 million gain, net of
tax expense, as a result of the transaction. For further information regarding
this transaction refer to Part I - Item 1 - Note 4, Acquisitions to the
condensed consolidated financial statements of this report.

  There were no other material changes to our contractual obligations from the
information previously provided in Item 7 of our Annual Report on Form 10-K for
the year ended December 31, 2021.


Critical Accounting Policies and Estimates

We have no material changes to our critical accounting policies and estimates discussed in our Annual Report on Form 10-K for the year ended December 31, 2021.





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Recently Adopted Accounting Standards

See Note 2, Recent Accounting Pronouncements, to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

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