In 2021, Fleetcor Technologies (FLT), a corporate payments and expense management firm, says it identified and corrected an error in its 2020 Cash Flow Statement. The error, according to Fleetcor, involves the presentation of deferred income taxes and changes in accounts payable, accrued expenses and customer deposits presented included in the company’s net cash provided by operating activities.

In its 2021 10-K, Fleetcor revealed the impact:

“...was an increase to the adjustment to reconcile net income to net cash provided by operating activities related to deferred income taxes of $30.8 million, with a corresponding decrease to changes in accounts payable, accrued expenses and customer deposits in operating activities of $30.8 million.”

Fleetcor says the impact to net cash provided by operating activities was zero.

Last year, we noted Fleetcor changed the way it calculates Adjusted Income which resulted in significantly higher reported earnings. Our analysis of Fleetcor’s footnotes suggest the new items Fleetcor strips out inflated the company’s adjusted net income by $102 million in 2020.

Fleetcor strips out deal costs despite being a serial acquirer— it has bought or invested in at lest 39 companies since 2000— and regularly touts its “expansion through acquisition” strategy. These costs are not unusual. They’re recurring and part of Fleetcor’s business model.

Separately, it now appears Fleetcor is headed to court rather than settling a legal matter as it hinted last year.

Fleetcor has been a target of regulators since first being asked to produce documentation in connection with a federal investigation in 2017. In 2019, the Federal Trade Commission (FTC) filed suit against Fleetcor and its Chief Executive Ronald Clarke, accusing the pair of lying to customers when the company promised it would save truck drivers and fleet managers money on fuel costs. The complaint alleges Fleetcor charged hundreds of millions of dollars in hidden fees.

The redress demanded by the FTC, in Fleetcor’s opinion, is unreasonable.

Last year though, we noted new language in Fleetcor’s annual report suggesting the dispute with the FTC could be settled or even closed without further action. The latest annual report isn’t as optimistic though as Fleetcor revealed it remains unable to come to terms with the FTC and:

“The court also set a tentative trial date of June 7, 2022.”