WEX Inc. [WEX] Filings

10-Q 1 wex-20210930.htm 10-Q wex-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-32426

WEX Inc.

(Exact name of registrant as specified in its charter)

Delaware

01-0526993

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

1 Hancock St.,

Portland,

04101

(Address of principal executive offices)

(Zip Code)

(207) 773–8171

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

WEX

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S–T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b–2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).

☐ Yes ☒ No

Number of shares of common stock outstanding as of October 28, 2021 was 44,818,545.

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TABLE OF CONTENTS




FORWARD–LOOKING STATEMENTS		3
ACRONYMS AND ABBREVIATIONS		5
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	59
Item 4.	Controls and Procedures	59

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	59
Item 1A.	Risk Factors	59
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 6.	Exhibits	62

SIGNATURE

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Unless otherwise indicated or required by the context, the terms “we,” “us,” “our,” “WEX,” or the “Company,” in this

Quarterly Report on Form 10–Q mean WEX Inc. and all of its subsidiaries that are consolidated under Generally Accepted Accounting Principles in the United States.

FORWARD–LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for statements that are forward-looking and are not statements of historical facts. This Quarterly Report includes forward-looking statements including, but not limited to, statements about management’s plan and goals. Any statements in this Quarterly Report that are not statements of historical facts are forward-looking statements. When used in this Quarterly Report, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Forward-looking statements relate to our future plans, objectives, expectations and intentions and are not historical facts and accordingly involve known and unknown risks and uncertainties and other factors that may cause the actual results or performance to be materially different from future results or performance expressed or implied by these forward-looking statements. The following factors, among others, could cause actual results to differ materially from those contained in forward-looking statements made in this Quarterly Report and in oral statements made by our authorized officers:

•the demand for worldwide travel as a result of COVID-19 and the length of time it may take for the travel industry to rebound to and grow beyond pre-pandemic levels;

•the extent to which the coronavirus (COVID-19) pandemic and measures taken in response thereto impact the Company’s business, results of operations and financial condition in excess of current expectations;

•the impact of fluctuations in fuel prices and fuel spreads in the Company’s international markets, including the resulting impact on the Company’s revenues and net income;

•the effects of general economic conditions, including those caused by the effects of COVID-19, on overall employment, travel and fueling patterns as well as payment and transaction processing activity;

•failure to expand the Company’s technological capabilities and service offerings as rapidly as the Company’s competitors;

•limitations on interchange fees;

•the failure to comply with the applicable requirements of MasterCard or Visa contracts and rules;

•the failure to maintain or renew key commercial agreements or to maintain volumes under such agreements;

•breaches of the Company’s technology systems or those of its third-party service providers and any resulting negative impact on its reputation, liabilities or relationships with customers or merchants;

•the actions of regulatory bodies, including banking and securities regulators, or possible changes in banking or financial regulations impacting the Company’s industrial bank, the Company as the corporate parent or other subsidiaries or affiliates;

•the Company’s ability to successfully finalize the recently announced Executive Leadership Team transition plan and to appoint additional officers;

•the success of the Company’s recently announced Executive Leadership Team and strategic reorganization;

•the effects of the Company’s business expansion and acquisition efforts;

•the failure of corporate investments to result in anticipated strategic value;

•the failure to comply with the Treasury Regulations applicable to non-bank custodians;

•potential adverse changes to business or employee relationships, including those resulting from the completion of an acquisition;

•competitive responses to any acquisitions;

•uncertainty of the expected financial performance of the combined operations following completion of an acquisition;

•the failure to complete or successfully integrate the Company’s acquisitions or to realize anticipated synergies and cost savings from such acquisitions;

•unexpected costs, charges, or expenses resulting from an acquisition;

•the failure to successfully acquire, integrate, operate and expand commercial fuel card programs;

•the impact and size of credit losses;

•the impact of changes to the Company’s credit standards;

•the failure to successfully implement the Company’s information technology strategies and capabilities in connection with its technology outsourcing and insourcing arrangements and any resulting cost associated with that failure;

•legal, regulatory, political and economic uncertainty surrounding the United Kingdom’s departure from the European Union and the resulting trade agreement;

•the impact of foreign currency exchange rates on the Company’s operations, revenue and income;

•changes in interest rates;

•the impact of the future transition from LIBOR as a global benchmark to a replacement rate;

•the impact of the Company’s debt instruments on the Company’s operations;

•the impact of increased leverage on the Company’s operations, results or borrowing capacity generally, and as a result of acquisitions specifically;

•the impact of sales or dispositions of significant amounts of the Company’s outstanding common stock into the public market, or the perception that such sales or dispositions could occur;

•the possible dilution to the Company’s stockholders caused by the issuance of additional shares of common stock or equity-linked securities, whether as result of the Company’s convertible notes or otherwise;

•the incurrence of impairment charges if the Company’s assessment of the fair value of certain of its reporting units changes;

•the uncertainties of litigation; as well as

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•other risks and uncertainties identified in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 1, 2021 and WEX’s quarterly report on Form 10-Q for the quarter ended June 30, 2021, filed with the Securities and Exchange Commission on August 4, 2021.

Our forward-looking statements and these factors do not reflect the potential future impact of any alliance, merger, acquisition, disposition or stock repurchases. The forward-looking statements speak only as of the date of the initial filing of this Quarterly Report and undue reliance should not be placed on these statements. The Company disclaims any obligation to update any forward-looking statements as a result of new information, future events or otherwise.

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ACRONYMS AND ABBREVIATIONS

The acronyms and abbreviations identified below are used in this Quarterly Report, including the condensed consolidated financial statements and the notes thereto. The following is provided to aid the reader and provide a reference point when reviewing this Quarterly Report.


2016 Credit Agreement			Credit agreement entered into on July 1, 2016, as amended from time to time, by and among the Company and certain of its subsidiaries, as borrowers, WEX Card Holding Australia Pty Ltd., as designated borrower, and Bank of America, N.A., as administrative agent on behalf of the lenders.
Adjusted net income or ANI			A non-GAAP measure that adjusts net income attributable to shareholders to exclude unrealized gains and losses on financial instruments, net foreign currency remeasurement gains and losses, change in fair value of contingent consideration, acquisition-related intangible amortization, other acquisition and divestiture related items, loss on sale of subsidiary, stock-based compensation, other costs, debt restructuring and debt issuance cost amortization, similar adjustments attributable to our non-controlling interests and certain tax related items.
Amended and Restated Credit Agreement			The 2016 Credit Agreement, as amended and restated on April 1, 2021.

ASC			Accounting Standards Codification




ASU			Accounting Standards Update
ASU 2020-06			Accounting Standards Update 2020-06-Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)

B2B			Business-to-business
benefitexpress			Benefit Express Services, LLC, a provider of highly configurable, cloud-based benefits administration technologies and services, and its indirect and direct parents, which were acquired as part of the benefitexpress Acquisition as defined in Note 4, Acquisitions to Item 1 - Financial Statements
CODM			Chief operating decision maker
Company			WEX Inc. and all entities included in the consolidated financial statements
Convertible Notes			Convertible senior unsecured notes due on July 15, 2027 in an aggregate principal amount of $310 million with a 6.5 percent interest rate, issued July 1, 2020
COVID-19 (or “coronavirus”)			An infectious disease caused by the SARS-CoV-2 virus. The World Health Organization declared the coronavirus outbreak a global pandemic on March 11, 2020
Discovery Benefits			Discovery Benefits, LLC, an employee benefits administrator that was acquired by the Company in March 2019 and was merged with and into WEX Health, Inc. effective March 31, 2021, with WEX Health being the sole surviving entity
DSUs			Deferred stock units
EBITDA			A non-GAAP measure that adjusts income before income taxes to exclude interest, depreciation and amortization


eNett			eNett International (Jersey) Limited
European Fleet business			WEX Fleet Europe (Go Fuel Card) and WEX Europe Services, collectively
European Securitization Subsidiary			Gorham Trade Finance B.V., a special purpose entity consolidated by the Company
FDIC			Federal Deposit Insurance Corporation
Federal Reserve Bank Discount Window			Monetary policy that allows WEX to borrow funds on a short-term basis to meet temporary shortages of liquidity caused by internal or external disruptions
GAAP			Generally Accepted Accounting Principles in the United States


HSA			Health Savings Account

Legal settlement			The settlement of legal proceedings and appeals related to the acquisition of eNett and Optal.
NAV			Net asset value
Net payment processing rate			The percentage of the dollar value of each payment processing transaction that the Company records as revenue from merchants less certain discounts given to customers and network fees



Notes			$400 million senior notes with a 4.75 percent fixed rate, issued on January 30, 2013, which were redeemed in full by the Company on March 15, 2021

NYSE			New York Stock Exchange

Optal			Optal Limited
Over-the-road			Typically, heavy trucks traveling long distances
Payment processing fuel spend			Total dollar value of the fuel purchased by fleets that have a payment processing relationship with the Company
Payment processing transactions			Total number of purchases made by fleets that have a payment processing relationship with the Company, where the Company maintains the receivable for the total purchase

Payment solutions purchase volume			Total dollar value of all WEX-issued transactions that use WEX corporate card products and virtual card products

Purchase volume			Total U.S. dollar value of all transactions in the Travel and Corporate Solutions and Health and Employee Benefit Solutions segments where interchange is earned by the Company
Redeemable non-controlling interest			The portion of the U.S. Health business’ net assets owned by a non-controlling interest holder, SBI, subject to redemption rights held by the non-controlling interest holder
SaaS			Software-as-a-service

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SBI			SBI Investments, Inc., which is owned by State Bankshares, Inc, and is a minority interest holder in PO Holding, Inc., a subsidiary of WEX Inc. and the direct parent of WEX Health.
SEC			Securities and Exchange Commission
Segment adjusted operating income			A non-GAAP measure that adjusts operating income to exclude specified items that the Company’s management excludes in evaluating segment performance, including unallocated corporate expenses, acquisition and divestiture related items (including acquisition-related intangible amortization), loss on sale of subsidiary, debt restructuring costs, stock-based compensation, and other costs.


Topic 606			Accounting Standards Codification Section 606, Revenue from Contracts with Customers
TSR			Total shareholder return
U.S. Health business			(i) from June 1, 2021, WEX Health, Inc. and benefitexpress, collectively, and (ii) prior to March 31, 2021, WEX Health, Inc. and Discovery Benefits, LLC., collectively
WEX			WEX Inc., unless otherwise indicated or required by the context
WEX Europe Services			A fleet business in Europe initially acquired by the Company from ExxonMobil
WEX Fleet Europe (Go Fuel Card)			A fleet business in Europe acquired from EG Group
WEX Health			WEX Health, Inc. the Company’s healthcare technology and administration solutions provider/business.
WEX Latin America			UNIK S.A., the Company’s Brazilian subsidiary, which is branded WEX Latin America. This subsidiary was sold on September 30, 2020.

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PART I

Item 1. Financial Statements.

WEX INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues
Payment processing revenue	$	226,126	$	171,077	$	627,941	$	522,575
Account servicing revenue	137,724		112,417		389,344		335,736
Finance fee revenue	67,769		46,307		179,421		144,945
Other revenue	51,145		52,315		156,298		157,623
Total revenues	482,764		382,116		1,353,004		1,160,879
Cost of services
Processing costs	121,207		102,244		347,177		307,152
Service fees	14,246		10,881		39,151		34,335
Provision for credit losses	14,127		12,283		32,148		66,851
Operating interest	2,124		5,262		7,019		20,151
Depreciation and amortization	28,226		26,202		83,871		76,115
Total cost of services	179,930		156,872		509,366		504,604
General and administrative	79,486		73,131		245,460		197,432
Sales and marketing	82,225		64,592		246,177		188,118
Loss on sale of subsidiary	—		46,362		—		46,362
Depreciation and amortization	40,301		39,314		118,360		118,907

Operating income	100,822		1,845		233,641		105,456
Financing interest expense	(32,493)		(40,950)		(98,250)		(101,813)
Change in fair value of contingent consideration	2,800		—		(44,900)		—
Other income	3,617		—		3,617		—
Net foreign currency loss	(9,962)		(784)		(11,375)		(31,973)
Net unrealized gain (loss) on financial instruments	6,424		3,774		19,470		(32,115)

Income (loss) before income taxes	71,208		(36,115)		102,203		(60,445)
Income tax expense (benefit)	19,340		21,602		16,924		(3,852)
Net income (loss)	51,868		(57,717)		85,279		(56,593)
Less: Net income from non-controlling interests	134		1,244		1,099		3,282
Net income (loss) attributable to WEX Inc.	51,734		(58,961)		84,180		(59,875)
Change in value of redeemable non-controlling interest	(3,416)		(6,879)		(72,283)		50,437
Net income (loss) attributable to shareholders	$	48,318	$	(65,840)	$	11,897	$	(9,438)

Net income (loss) attributable to shareholders per share:
Basic	$	1.08	$	(1.49)	$	0.27	$	(0.22)
Diluted	$	1.07	$	(1.49)	$	0.26	$	(0.22)
Weighted average common shares outstanding:
Basic	44,861		44,166		44,664		43,720
Diluted	45,279		44,166		45,334		43,720

See notes to the unaudited condensed consolidated financial statements.

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WEX INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income (loss)	$	51,868	$	(57,717)	$	85,279	$	(56,593)
Foreign currency translation	(20,368)		15,147		(29,927)		(2,913)
Comprehensive income (loss)	31,500		(42,570)		55,352		(59,506)
Less: Comprehensive income attributable to non-controlling interests	134		1,676		781		3,466
Comprehensive income (loss) attributable to WEX Inc.	$	31,366	$	(44,246)	$	54,571	$	(62,972)

See notes to the unaudited condensed consolidated financial statements.

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WEX INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)


	September 30, 2021		December 31, 2020
Assets
Cash and cash equivalents	$	533,830	$	852,033
Restricted cash	628,436		477,620
Accounts receivable (net of allowances of $65,692 in 2021 and $59,147 in 2020)	3,053,565		1,993,329
Securitized accounts receivable, restricted	126,648		93,236
Prepaid expenses and other current assets	93,275		86,629
Total current assets	4,435,754		3,502,847
Property, equipment and capitalized software (net of accumulated depreciation of $465,264 in 2021 and $402,406 in 2020)	178,797		188,340
Goodwill	2,905,520		2,688,138
Other intangible assets (net of accumulated amortization of $963,071 in 2021 and $835,163 in 2020)	1,690,916		1,552,012
Investment securities	36,855		37,273
Deferred income taxes, net	36,431		17,524
Other assets	229,858		197,227

Total assets	$	9,514,131	$	8,183,361
Liabilities and Stockholders’ Equity
Accounts payable	$	1,289,591	$	778,207
Accrued expenses	432,879		362,472
Restricted cash payable	627,217		477,620
Short-term deposits	1,016,327		911,395
Short-term debt, net	183,244		152,730
Other current liabilities	55,377		58,429

Total current liabilities	3,604,635		2,740,853
Long-term debt, net	2,802,317		2,874,113
Long-term deposits	600,496		148,591
Deferred income taxes, net	204,730		220,122
Other liabilities	266,221		164,546
Total liabilities	7,478,399		6,148,225
Commitments and contingencies (Note 15)
Redeemable non-controlling interest	191,487		117,219
Stockholders’ Equity
Common stock $0.01 par value; 175,000 shares authorized; 49,245 shares issued in 2021 and 48,616 in 2020; 44,817 shares outstanding in 2021 and 44,188 in 2020	491		485
Additional paid-in capital	830,074		872,711
Retained earnings	1,300,849		1,286,976
Accumulated other comprehensive loss	(114,827)		(82,935)
Treasury stock at cost; 4,428 shares in 2021 and 2020	(172,342)		(172,342)
Total WEX Inc. stockholders’ equity	1,844,245		1,904,895
Non-controlling interest	—		13,022
Total stockholders’ equity	1,844,245		1,917,917
Total liabilities and stockholders’ equity	$	9,514,131	$	8,183,361

See notes to the unaudited condensed consolidated financial statements.

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WEX INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)


	Common Stock Issued			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Treasury Stock		Retained Earnings		Non-Controlling Interest		Total Stockholders’ Equity
	Shares	Amount


























Balance at December 31, 2020	48,616	$	485	$	872,711	$	(82,935)	$	(172,342)	$	1,286,976	$	13,022	$	1,917,917
Cumulative effect adjustment1	—	—		(41,982)		—		—		1,976		—		(40,006)
Balance at January 1, 2021	48,616	485		830,729		(82,935)		(172,342)		1,288,952		13,022		1,877,911
Stock issued under share-based compensation plans	394	4		22,555		—		—		—		—		22,559
Share repurchases for tax withholdings	—	—		(21,062)		—		—		—		—		(21,062)
Stock-based compensation expense	—	—		17,886		—		—		—		—		17,886
Change in value of redeemable non-controlling interest	—	—		—		—		—		(25,044)		—		(25,044)
Foreign currency translation	—	—		—		(6,558)		—		—		(319)		(6,877)
Net income	—	—		—		—		—		22,479		374		22,853
Balance at March 31, 2021	49,010	$	489	$	850,108	$	(89,493)	$	(172,342)	$	1,286,387	$	13,077	$	1,888,226
Stock issued under share-based compensation plans	214	2		20,479		—		—		—		—		20,481
Share repurchases for tax withholdings	—	—		(884)		—		—		—		—		(884)
Stock-based compensation expense	—	—		20,629		—		—		—		—		20,629
Acquisition of non controlling interest	—	—		(81,631)		(2,284)		—		—		(13,077)		(96,992)
Change in value of redeemable non-controlling interest	—	—		—		—		—		(43,823)		—		(43,823)
Foreign currency translation	—	—		—		(2,682)		—		—		—		(2,682)
Net income	—	—		—		—		—		9,967		—		9,967
Balance at June 30, 2021	49,224	491		$	808,701	$	(94,459)	$	(172,342)	$	1,252,531	$	—	$	1,794,922
Stock issued under share-based compensation plans	21	—		704		—		—		—		—		704

Share repurchases for tax withholdings	—	—		(1,066)		—		—		—		—		(1,066)

Stock-based compensation expense	—	—		21,735		—		—		—		—		21,735
Change in value of redeemable non-controlling interest	—	—		—		—		—		(3,416)		—		(3,416)

Foreign currency translation	—	—		—		(20,368)		—		—		—		(20,368)
Net income	—	—		—		—		—		51,734		—		51,734
Balance at September 30, 2021	49,245	$	491	$	830,074	$	(114,827)	$	(172,342)	$	1,300,849	$	—	$	1,844,245

1 Reflects the impact of the Company’s modified retrospective adoption of ASU 2020-06 (See Note 1, Basis of Presentation).

See notes to the unaudited condensed consolidated financial statements.

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WEX INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)



	Common Stock Issued			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Treasury Stock		Retained Earnings		Non-Controlling Interest		Total Stockholders’ Equity
	Shares	Amount
Balance at January 1, 2020	47,749	$	477	$	675,060	$	(115,449)	$	(172,342)	$	1,530,614	$	9,385	$	1,927,745
Stock issued under share-based compensation plans	189	2		1,950		—		—		—		—		1,952
Share repurchases for tax withholdings	—	—		(8,817)		—		—		—		—		(8,817)
Stock-based compensation expense	—	—		12,533		—		—		—		—		12,533
Change in value of redeemable non-controlling interest	—	—		—		—		—		(2,624)		—		(2,624)
Foreign currency translation	—	—		—		(40,935)		—		—		(469)		(41,404)
Net (loss) income	—	—		—		—		—		(13,632)		1,221		(12,411)
Balance at March 31, 2020	47,938	479		680,726		(156,384)		(172,342)		1,514,358		10,137		1,876,974
Stock issued under share-based compensation plans	5	—		184		—		—		—		—		184
Share repurchases for tax withholdings	—	—		(76)		—		—		—		—		(76)
Stock-based compensation expense	—	—		14,219		—		—		—		—		14,219
Change in value of redeemable non-controlling interest	—	—		—		—		—		59,940		—		59,940
Foreign currency translation	—	—		—		23,123		—		—		221		23,344
Net income	—	—		—		—		—		12,718		576		13,294
Balance at June 30, 2020	47,943	479		695,053		(133,261)		(172,342)		1,587,016		10,934		1,987,879
Stock issued under share-based compensation plans	30	—		2,091		—		—		—		—		2,091
Fair value of stock issued through private placement, net of issuance costs of $968	577	6		92,970		—		—		—		—		92,976
Share repurchases for tax withholdings	—	—		(378)		—		—		—		—		(378)
Equity component of the Convertible Notes, net of allocated issuance costs of $570 and taxes of $13,623	—	—		41,066		—		—		—		—		41,066
Stock-based compensation expense	—	—		17,882		—		—		—		—		17,882
Change in value of redeemable non-controlling interest	—	—		—		—		—		(6,879)		—		(6,879)
Transfer of cumulative translation adjustment on the sale of subsidiary	—	—		—		5,473		—		—		—		5,473
Foreign currency translation	—	—		—		14,715		—		—		432		15,147
Net (loss) income	—	—		—		—		—		(58,961)		707		(58,254)
Balance at September 30, 2020	48,550	$	485	$	848,684	$	(113,073)	$	(172,342)	$	1,521,176	$	12,073	$	2,097,003

See notes to the unaudited condensed consolidated financial statements.

Table of Contents

WEX INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities
Net income (loss)	$	85,279	$	(56,593)
Adjustments to reconcile net income (loss) to net cash (used for) provided by operating activities:
Net unrealized (gain) loss	(7,499)		54,661
Change in fair value of contingent consideration	44,900		—
Stock-based compensation	60,250		44,634
Depreciation and amortization	202,231		195,022
Loss on sale of subsidiary	—		46,362
Gain on sale of equity investment	(3,617)		—
Debt restructuring and debt issuance cost amortization	13,315		9,464
Deferred tax benefit	(8,829)		(16,514)
Provision for credit losses	32,148		66,851


Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable and securitized accounts receivable	(1,138,233)		406,095
Prepaid expenses and other current and other long-term assets	13,212		(892)
Accounts payable	517,455		(48,528)
Accrued expenses and restricted cash payable	211,855		46,367
Income taxes	(12,363)		23,697
Other current and other long-term liabilities	(20,459)		3,830

Net cash (used for) provided by operating activities	(10,355)