v2.4.0.8
Segment Information
 9 Months Ended
Sep. 30, 2013
Segment Reporting [Abstract]  
Segment Information
15.
Segment Information
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The operating segments are reviewed separately as each operating segment represents a strategic business unit that generally offers different products and serves different markets.
The Company’s chief operating decision maker evaluates the operating results of the Company’s reportable segments based upon revenues and “adjusted net income,” which is defined by the Company as net income adjusted for fair value changes of derivative instruments, the amortization of purchased intangibles, the net impact of tax rate changes on the Company’s deferred tax asset and related changes in the tax-receivable agreement, deferred loan costs associated with the extinguishment of debt, certain non-cash asset impairment charges, the gains on the extinguishment of a portion of the tax receivable agreement and adjustments attributable to noncontrolling interest. These adjustments are reflected net of the tax impact.
The Company operates in two reportable segments, Fleet Payment Solutions and Other Payment Solutions. The Fleet Payment Solutions segment provides customers with payment and transaction processing services specifically designed for the needs of vehicle fleet customers. This segment also provides information management services to those fleet customers. The Other Payment Solutions segment provides customers with a payment processing solution for their corporate purchasing and transaction monitoring needs. Revenue in this segment is derived from the Company’s corporate purchase cards, virtual and prepaid card products. The corporate purchase card products are used by businesses to facilitate purchases of products and to utilize the Company’s information management capabilities.
Financing interest expense through the Company’s corporate debt, including the term loan and bond issuance, and net realized and unrealized losses on derivative instruments are allocated to the Fleet Payment Solutions segment in the computation of segment results for internal evaluation purposes. Total assets are not allocated to the segments.
The following table presents the Company’s reportable segment results on an adjusted net income basis for the three months ended September 30, 2013 and 2012:
 
Total
Revenues
 
Operating
Interest
Expense
 
Depreciation
and
Amortization
 
Provision for
Income Taxes
 
Adjusted Net
Income
Three months ended September 30, 2013
 
 
 
 
 
 
 
 
 
Fleet payment solutions
$
136,874

 
$
427

 
$
5,767

 
$
21,726

 
35,119

Other payment solutions
54,651

 
549

 
342

 
7,577

 
15,303

Total
$
191,525

 
$
976

 
$
6,109

 
$
29,303

 
50,422

Three months ended September 30, 2012
 
 
 
 
 
 
 
 
 
Fleet payment solutions
$
117,877

 
$
838

 
$
5,856

 
$
21,874

 
$
33,641

Other payment solutions
43,090

 
404

 
441

 
5,589

 
8,394

Total
$
160,967

 
$
1,242

 
$
6,297

 
$
27,463

 
$
42,035

The following table presents the Company’s reportable segment results on an adjusted net income basis for the nine months ended September 30, 2013 and 2012:
 
Total
 Revenues 
 
 Operating 
Interest
Expense
 
Depreciation
and
 Amortization 
 
Provision for
Income Taxes
 
 Adjusted Net 
Income
Nine months ended September 30, 2013
 
 
 
 
 
 
 
 
 
Fleet payment solutions
$
393,953

 
$
1,392

 
$
17,358

 
$
58,474

 
99,950

Other payment solutions
141,227

 
1,813

 
1,346

 
17,128

 
29,840

Total
$
535,180

 
$
3,205

 
$
18,704

 
$
75,602

 
129,790

Nine months ended September 30, 2012
 
 
 
 
 
 
 
 
 
Fleet payment solutions
$
341,709

 
$
2,685

 
$
17,699

 
$
56,027

 
$
94,169

Other payment solutions
112,444

 
744

 
1,241

 
13,607

 
22,512

Total
$
454,153

 
$
3,429

 
$
18,940

 
$
69,634

 
$
116,681


 The following table reconciles adjusted net income to net income:
 
Three months ended 
 September 30,
 
Nine months ended 
 September 30,
 
2013
 
2012
 
2013
 
2012
Adjusted net income WEX Inc.
$
50,422

 
$
42,035

 
$
129,790

 
$
116,681

Unrealized (loss) gains on fuel price derivatives
(2,733
)
 
(12,849
)
 
1,234

 
(1,841
)
Amortization of acquired intangible assets
(8,051
)
 
(5,411
)
 
(24,564
)
 
(15,481
)
Goodwill impairment
—

 
(16,171
)
 
—

 
(16,171
)
Deferred loan costs associated with the extinguishment of debt
—

 
—

 
(1,004
)
 
—

Non-cash adjustments related to tax receivable agreement
150

 
—

 
150

 
—

Change in tax refund due to former shareholders of RD Card Holding Australia
—

 
—

 
—

 
9,750

Other adjustments related to Fleet One acquisition
658

 
—

 
658

 
—

ANI adjustments attributable to noncontrolling interest
313

 
77

 
971

 
77

Tax impact
3,079

 
6,617

 
7,505

 
(25,146
)
Net earnings attributable to WEX Inc.
$
43,838

 
$
14,298

 
$
114,740

 
$
67,869


The tax impact of the foregoing adjustments is the difference between the Company’s U.S. GAAP tax provision and a pro forma tax provision based upon the Company’s adjusted net income before taxes. The methodology utilized for calculating the Company’s adjusted net income tax provision is the same methodology utilized in calculating the Company’s U.S. GAAP tax provision.