8-KRegulation FD

CORPAY, INC. 8-K Report, Regulation FD Disclosure (Dec 19, 2019)

Filed December 19, 2019For Securities:CPAY

Summary

CORPAY, INC. (formerly FLEETCOR) filed an 8-K on December 19, 2019, to disclose an impasse in negotiations with the Federal Trade Commission (FTC) regarding its U.S. direct fuel card business advertising and marketing practices. While CORPAY believes the FTC's claims are without merit and not financially material, the FTC may file a civil complaint. The company stated that the impasse is due to what it considers unreasonable demands for redress from the FTC. The company provided context for the U.S. direct fuel card business, which generated approximately $600 million in revenue for the twelve months ending September 30, 2019. Approximately $150 million of this revenue was derived from avoidable risk-related fees, such as high-risk credit and late charges, from business accounts. CORPAY remains confident in its compliance with applicable laws and commitment to customer service and transparency.

Key Highlights

  • 1Impasse reached with the FTC regarding U.S. direct fuel card advertising and marketing practices.
  • 2FTC may file a civil complaint against CORPAY.
  • 3CORPAY believes FTC's claims are without merit and not financially material.
  • 4Impasse stems from perceived unreasonable redress demands by the FTC.
  • 5U.S. direct fuel card business generated ~$600 million revenue in the twelve months ending Sept 30, 2019.
  • 6~$150 million of business account revenue was from avoidable risk-related fees (high-risk credit, late charges).
  • 7CORPAY asserts confidence in its legal compliance and commitment to customer service.

Frequently Asked Questions

The main issue is an impasse in negotiations between CORPAY (formerly FLEETCOR) and the Federal Trade Commission (FTC) concerning advertising and marketing practices in CORPAY's U.S. direct fuel card business. This impasse could lead to a civil complaint filed by the FTC.

CORPAY believes the FTC's claims are without merit and states they are not and will not be material to the company's financial performance. The company is confident it has acted in accordance with all applicable laws.

The U.S. direct fuel card business generated approximately $600 million in revenue for the twelve months ending September 30, 2019. Roughly $150 million of this revenue came from business accounts through avoidable risk-related fees like high-risk credit and late charges.

Potential risks include an FTC civil complaint, which could result in legal costs, potential penalties or required changes in business practices, and negative publicity. While CORPAY states the matter is not material, any legal action or adverse outcome could still impact investor confidence or future operations.