Thank you for joining us, and welcome to the WEX Second Quarter 2020 Earnings Conference Call. Mr. Elder, please proceed. Thank you, operator. Good morning, everyone. With me today is Melissa Smith, our CEO; and our CFO, Roberto Simon. The press release we issued earlier this morning and a slide deck to walk through our prepared remarks have been posted to the Investor Relations section of our website at wexinc.com. A copy of the release and the slide deck have also been included in 8-Ks we submitted to the SEC. As a reminder, we will be discussing non-GAAP metrics, specifically, adjusted net income attributable to shareholders, which we refer to as adjusted net income or ANI during our call. Adjustments for this year's second quarter to arrive at these metrics include unrealized losses on financial instruments, net foreign currency remeasurement losses, acquisition-related intangible amortization, other acquisition-related items, stock-based compensation, other costs, debt restructuring and debt issuance cost amortization, ANI adjustments attributable to noncontrolling interests and certain tax-related items. Please see Exhibit 1 of the press release for an explanation and reconciliation of adjusted net income to GAAP net income attributable to shareholders. I would also like to remind you that we will discuss forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in our press release and the risk factors identified in our annual report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 28, 2020; our quarterly report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on May 11, 2020; and subsequent SEC filings. While we may update forward-looking statements in the future, we disclaim any obligations to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today. With that, I'll turn the call over to Melissa Smith.

Good morning, everyone, and thank you for joining us today. Importantly, I hope all of you and your families are safe and healthy. Like last quarter, I will start today's call with an overview of our Q2 performance highlights before providing an update on some of the key metrics in the current environment. This will include what we're seeing as we progress into the back half of the year as well as some color around key announcements we made this quarter. I will close with talking about how we're progressing with our long-term strategic objective. Then Roberto will provide more detail about our financial results for the quarter as well as some balance sheet highlights before we open it up for questions. As we begin this morning, let me express my continued appreciation for our employees, who have been working hard to continue to build upon our outstanding technology and products, while providing the quality service that our customers and partners expect. The work they are doing will not only help us navigate through this unusual period, but equally important, will ensure that WEX emerges stronger as operating conditions improve. Turning to our second quarter performance highlights on Slide 3. Q2 saw the full quarter impact of COVID-19 on our business. The quarter played out broadly along the lines of what we had outlined in May, with revenue declining 21% versus the prior year quarter to $347.1 million due to compressed volumes across all of our business segments and significantly lower fuel prices. With that being said, I'm pleased to report that we've seen volumes improve across all segments from the Q2 lows. And of note, we continue to see year-over-year revenue growth in our U.S. health business. From a profitability standpoint, GAAP net income was $1.66 per diluted share, and adjusted net income was $1.21 per diluted share, down 47% year over year. This was driven by lower year-over-year spend volumes across all of our business segments, as mentioned earlier, and lower year-over-year fuel prices. Disciplined execution of our cost containment initiatives that I discussed last quarter helped to partially offset some of the declines this quarter. Starting with the Fleet segment. Revenue was down 24% year over year, primarily driven by unfavorable fuel prices and lower volumes due to COVID-19. The lower volumes also led to softness in other ancillary revenue. Same-store sales in the North American fleet business were down 21% compared to last year as the impact of the pandemic permeated all of the verticals we measure. This was partially offset by contributions from the EG, Go Fuel Card acquisition that we closed in July 2019 as well as new business signed in the quarter. This will be the final quarter where we will see outsized year-over-year contributions from the Shell and Chevron portfolios, which are performing as expected, given overall business volume trends. Our Travel and Corporate Payments segment was the most severely impacted by the pandemic and the resulting decline in travel activity. Segment revenues decreased by 40% year over year, while travel-related revenues in this segment were down 68%, and corporate payments-related revenue was flat. Travel purchase volumes were down 87% from the second quarter of 2019 as travel restrictions and work-from-home orders remained in place through much of the world, coupled with a decline in consumer and business activity. Corporate payments volumes were flat as the pandemic slowed economic activity and B2B payment volumes, especially for small and midsized businesses. Partially offsetting these declines was a reduction in scheme fees, which were $10 million lower than last year. Our Health and Employee Benefits segment, which posted another quarter of year-over-year top line growth, was up 6% from the year-ago period, driven by the strength in the U.S. healthcare business. We're encouraged by the 15% year-over-year growth in the average number of SaaS accounts on our WEX Health platform as customer demand for our HSA, FSA and COBRA products remain strong. This included a 33% revenue increase from our COBRA offering. However, health purchase volume was down 26% as compared to the prior quarter as customers deferred nonessential medical treatments as a result of the pandemic this year. I'd like to take a moment and provide you with some additional color on the current environment and how we're responding to the challenge. Beginning with employees, our work-from-home program remained in place this quarter, with nearly all of our workforce still currently working remotely. I'm pleased to report that we didn't miss a beat in terms of our remote technology capabilities, and importantly, our productivity and customer service. We also made good progress on our diversity and inclusion initiative, which is focused on building upon a culture of inclusion, embracing diversity in the workplace and our communities and having diversity be part of our brand in the marketplace. WEX launched various programs and resources to support this initiative throughout the past several years, including our most recent group to support our African-American colleagues. We've held open forums with employees to discuss the impact of racism. We'll use our corporate philanthropic dollars to reinforce our commitment. Additionally, we'll be rolling out unconscious bias training to all employees in the company, beginning with the board and the executive leadership team. Given where the world is today, these efforts are resonating with our employee base. While we don't have all the answers, we will continue to put people first and lead with their commitment to D&I. From a customer standpoint, we have innovated and adapted our technology and products, and we continue to see customers taking advantage of both to conduct business during this new normal. In the Fleet business, we have products that offer contactless and digital payments, both features that are resonating from a health and safety standpoint. Drivers are increasingly utilizing DriverDash, to make contactless transactions while on the road. Our small business customers are also leveraging the WEX EDGE savings network, which was launched early this quarter to access fuel, tire, hotel, and wireless discounts, among others. To date, we have saved small businesses nearly $500,000 through these discounts and rolling this product out to a wider group of customers. We've seen an increase in fleet prospect interest by bundling this offering. With our health customers, we're focused on ensuring the end consumer is top of mind. Our SpeedLift offering announced last quarter continues to gain momentum as employers and consumers rely on SpeedLift to counter challenges created by COVID-19 and offset unexpected costs. We extended our network of offerings to include easy digital offerings like eyeglass purchases, so that commerce can continue to happen. Before I turn to our view for the balance of the year, I want to provide an update around our strategic priorities and cost containment program. As you can see on Slide 4, we remain on track and aligned with the priorities and initiatives outlined in May. As part of our initial response to COVID-19 to better align our needs with the new operating environment, we implemented a handful of cost containment measures last quarter. This included cutting discretionary spend and eliminating most new hiring across the organization, while protecting investments in each of the businesses. We continue to evaluate these levers, among others, on an ongoing basis to keep us on our front foot during these unprecedented times. Since our last call, we did reduce headcount in our international locations, as we discussed, but we have not made any further permanent reductions in our U.S. workforce. Furthermore, all furloughed employees who have not already returned to work will return next week. Turning to Slide 5. We're focusing on our technology investments in areas where we continue to grow, like the U.S. health business, and also deploying our CapEx where we see growth opportunities in the future. The investments in our products we're making are paying off, as we look for ways to further build out our growth and diversification plans. During the quarter, in Fleet, we finished an important milestone on the WEX Europe fleet business by successfully completing the migration of the EG Fleet business onto our own cloud-based platform. This is an important prerequisite to building out our European presence. In addition, in the U.S., we also completed the migration of the Valero portfolio onto our products and technology. We're also expanding the ways our customers can buy using our products. EDGE is an example of creating a buying community, while we're also now offering local fueling functionality to our over-the-road customers. In the Travel and Corporate Payments segment, we've migrated nearly 70% of the spend volume onto our own internal transaction processing platform. In doing so, we've increased reliability for our customers and reduced some of our variable cost base from using a third-party vendor, which will help to increase our scalability. Finally, in the U.S. healthcare business, we're seeing tremendous support for the July 2020 product release, which includes additional enhancements to the features and functionality of our employer analytics. We also continue to build off the success of WEX Momentum, which is a series of virtual learning and networking events launched in May. In only a few short months, we've received thousands of views from individuals across the country. The investments we have made continue to build upon our differentiation in both our products and technology have been an important part in winning new business. Slide 5 illustrates some of our impressive recent wins and renewals. During the quarter, we signed OMV. OMV is a European-based oil company with 2,100 locations across 10 countries, who will use us for their private label processing needs. We've also signed J.B. Hunt, one of the largest trucking companies in the country. FIS has signed up to use our bill pay technology as part of their software offerings to banks. And Onyx CenterSource will use our travel solutions in the Travel and Corporate Payments segment. Finally, Transamerica will be using our technology platform for their consumer-directed healthcare accounts. I'm also proud to announce that we've recently renewed contracts with some of our fantastic customers and partners, including Enterprise Truck Rental, Schneider, Apple Leisure Group, Zurich Insurance and Fifth Third Bank, among others. Our sales and marketing teams have continued to foster relationships and close new business despite the pandemic, which is an important part of our ongoing growth strategy. Now I want to spend a few minutes looking ahead to the back half of 2020. While parts of Europe are easing restrictions and regions of the U.S. are starting to reopen, there's still a long road ahead to sustain recovery. Given the unpredictable nature of COVID-19, we expect the business activity in our customer base to continue to be impacted through the second half of the year. We also anticipate some additional noise as pandemic-related stimulus tapers off and we can now note that smaller businesses and our fleet customer base are showing slower signs of recovery in business volume than larger businesses. Nevertheless, we're encouraged to see steady improvements across our key weekly metrics over the past month. Turning to Slide 6. We provided a weekly look at volume trends similar to what we did last quarter. In the Fleet segment, month-to-date gallon volumes are down approximately 2.9% in July from the year-ago period compared to a decline of 20% in April. Our North American fleet business trended upwards through the second quarter with month-to-date July volume down 8.7% year over year compared to a 25% decline in April. Our OTR business continued to demonstrate resilience with month-to-date July volumes up 8.5% compared to an 11% decline in April. International volumes remained the most challenged, down 9.9% year over year in July, but up from a nearly 50% decline in April. While fleet volumes remain down, we expect these trends and further stabilization to gradually continue into the third quarter. In our Travel and Corporate Payments segment, spend volumes were down 65% month-to-date in July from the previous period compared to a decline of about 70% in April. Global travel-related spend volumes improved slightly from April with volumes down 81% year-over-year in month-to-date July. Volume levels remain compressed due to continued declines in our travel-related revenues across the world. While it's still difficult to anticipate when purchase volumes will begin to normalize, we remain well positioned to recapture volume once market recovery begins. Our Corporate payments spend volumes increased 6% so far in July. Finally, turning to our U.S. health business on Slide 7. We expect the trajectory of spend volumes that we saw in June and July to continue through the remainder of 2020, particularly as states reopen and customers begin to spend on elective healthcare procedures and resume a more normal cadence of doctor visits. Importantly, SaaS account growth, which drives about two-thirds of the revenue, remains strong and is anticipated to trend positively at a mid- to high-teens growth rate in the coming months. I'd like to turn quickly to the ongoing litigation surrounding the eNett and Optal acquisition. We continue to remain confident in our position but we cannot predict the outcome of these proceedings. There's a trial of preliminary issues scheduled for the end of September, where certain issues related to the case will be decided, so it would be impossible to predict the outcome at this point in time. We'll provide updates on the status of this litigation as they become available. Before I close out my comments, I want to briefly touch on the $400 million investment for Warburg Pincus that we closed a few weeks ago. This investment reaffirms our relationship with Warburg, who has demonstrated their strong commitment to the future growth of WEX. Coupled with the recent amendments to our credit agreement, this investment further strengthens our balance sheet and provides us with more certainty through increased financial flexibility, improved liquidity, and additional cash on hand. These allow us to remain focused on our long-term strategic initiatives to drive sustainable growth. In spite of the challenges we continue to face, the nimbleness with which we are executing and the resilience of the WEX platform give me confidence in our future. First and foremost, our employees remain healthy and safe. They are the cornerstone of our organization and a conduit to our customers and partners globally. They continue to go above and beyond in our WEX community to bring best-in-class technology solutions and unparalleled service to our customers and partners who depend on the WEX platform to keep their businesses up and running. From a customer and partner activity standpoint, recent data indicates that trends are significantly better than three months ago, ensuring gradual improvement, or at a minimum, some level of stability. We're encouraged by the July volumes across our business segments and are hopeful steady progress will continue. Lastly, we've proven that we can quickly adapt our business under challenging operating conditions. We've made a number of strategic decisions this quarter to ensure that WEX is well-positioned to succeed post-pandemic, including strengthening our balance sheet and liquidity position and continuing to execute across our cost containment program, while making targeted investments for future growth. WEX products continue to be integral to our customers' operations in the current environment, and we're confident that volumes will return as the economy begins to recover. In the meantime, we remain committed to our strategy and are focused on driving sustained long-term growth and value for our shareholders. With that, I will turn it over to Roberto.

Thank you, Melissa, and good morning, everyone. As we expected, the second quarter was unprecedented for us as we maneuver through COVID-19. Despite the challenging economic conditions, we continue to execute on the strategic pillars, drive efficiency through operations, deliver on the cost containment initiatives and improve the balance sheet position by increasing liquidity and financial flexibility. Just as important, as you heard from Melissa, we continue to focus on our customers, partners and prospects. Now let's take a look at the quarter results on Slide No. 9. For the second quarter, total revenue was $347.1 million, a 21% decrease year over year. GAAP net income attributable to shareholders was $72.7 million. Non-GAAP adjusted net income was $53 million or $1.21 per diluted share. Turning to Slide 10. We can see the overall revenue performance by segment. Breaking down the revenue, Health and Employee Benefit Solutions grew 6%; Fleet segment revenue declined 24%; and finally, Travel and Corporate Solutions posted a 40% decrease. Moving to segment results, starting with Fleet on Slide No. 11. Total Fleet Solutions revenue for the quarter was $204.4 million, a 24% decline versus prior year. The primary impacts were lower volumes due to the government staying-at-home orders and lower domestic fuel prices. These declines were partially offset by new customer wins, renewals as well as the benefit from the EG Fuel Card acquisition that we completed in July 2019. Payment processing transactions declined 19% when compared to last year with North American fleet down 21% and over-the-road down 7%. As Melissa noted earlier, fleet volumes progressively improved through the quarter. The net payment processing rate was up 23 basis points from Q2 2019 to 1.47%. The year-over-year increase was mainly due to the EG Fuel Card acquisition, the significant decline in U.S. fuel prices and positive spreads in Europe. The net late fee rate also increased to 57 basis points in comparison to the 54 basis points in Q2 2019. The increase was largely due to the Shell and Chevron portfolio additions. To end this segment, the average domestic fuel price in Q2 2020 was $2.07 versus $2.91 in Q2 2019, which lowered the fleet revenue approximately $32 million. This amount was reduced by approximately $3 million in positive spreads from Europe. Turning to Travel and Corporate Solutions on Slide No. 12. As anticipated, total segment revenue for the quarter decreased 40% to $54.5 million. Breaking it down, corporate payments customer revenue was flat year over year, while revenue from travel-related customer was down 68%. Purchase volume issued by WEX was also down 68% to $3.2 billion. The net interchange rate was 137 basis points, which was up 60 basis points from Q2 last year. The increase was mainly due to two factors. First, there was a significant swing to corporate payments volume, which has a much higher net interchange. And second, the recent scheme fee contract renewal that has better economics. Finally, let's take a look at the Health and Employee Benefit Solutions segment on Slide No. 13. Building off an impressive first quarter, the segment experienced a solid Q2 with revenue increasing to $88.2 million or a 6% increase compared to last year. In the U.S. Health business, revenue grew 9%, driven by SaaS accounts growth, which was 15%. Breaking it down, nonpayment processing revenue grew 17%. Due to COVID-19, payment processing revenue declined 18%. As Melissa mentioned in her remarks, volumes have improved through the quarter, and we anticipate the healthcare spending will continue to trend upwards in the second half of the year. Now let's move on to expenses on Slide 14. For the quarter, total cost of service expense was $161.9 million, slightly up from $160.8 million in Q2 last year. Total SG&A, depreciation and amortization expenses were $156.4 million, which is down $29.9 million versus 2019. We are on track to achieve the $60 million to $65 million in cost savings in 2020 that we outlined last quarter. In light of current conditions, we anticipate keeping most of these measures in place. Breaking down the line items within this categories, processing costs increased less than 1%. However, sequentially, they are down about $5 million from Q1 this year. Service fee decreased $4.5 million due mainly to lower processing volumes and the conversion to an internal processing platform. Credit loss on a consolidated basis was $20.6 million versus $14.8 million in Q2 last year, primarily driven by credit losses within the Fleet segment. In the Fleet segment, credit losses were up $3.8 million versus prior year. This equates to 26.9 basis points of spend volume compared to 13.9% in Q2 2019. The basis points were unusually elevated because of the combination of a significant drop-off in gallon volume and lower fuel prices. On a positive note, I'm pleased to report that the accounts receivable aging is in good condition despite the current economy. In the Travel and Corporate Payment segment, credit loss was $2.2 million, which is much lower than last quarter and reflects the ongoing challenges we are seeing in the travel industry. Operating interest expense was $6.5 million, down $4.2 million from the prior year quarter. This is mainly due to lower interest rates. G&A expenses decreased $14 million versus Q2 last year, mostly due to the cost containment efforts, M&A fees and restructuring charges. Lastly, the sales and marketing line decreased $18.1 million, driven by lower partner rebates and the cost containment measures. Let's discuss taxes on Slide 15. On a GAAP basis, the effective tax rate was 310.8% compared to 28% for the second quarter of 2019. On an ANI basis, the tax rate remained consistent at 25.2% for both Q2 this year and last year. Changing gears to Slide 16, I would like to provide an update on the balance sheet. Despite a very volatile environment, we remain in a healthy position with robust levels of liquidity on hand, which were boosted by the Warburg Pincus' investment that we closed in July. We remain committed to maintaining a strong balance sheet and we'll continue to evaluate the market to determine if there are opportunities to further enhance it. We ended the quarter with $1.3 billion in cash, up from $811 million at the end of 2019. From a liquidity perspective, the corporate cash balance was $580 million at quarter end. This balance increased more than $75 million from Q1 2020, thanks to another quarter of a strong cash generation. We continue to keep tight controls on the capital allocation as we prioritize investments and manage our cost structure. Additionally, there is over $750 million of available borrowings under the company's credit agreement. Combining this, the corporate cash at the end of this quarter and the new investment from Warburg Pincus at the beginning of the third quarter, the company has access to over $1.7 billion in capital. We continue to believe that we have adequate funds to meet our operating, investing and financial needs in the current conditions. To conclude this section. During the quarter, we also amended the credit agreement. The most notable changes include increasing the maximum leverage ratio covenants and permitting unlimited corporate cash netting for six months following the resolution of the eNett and Optal transaction. After this six-month period, there is a permanent increase in cash netting allowed when compared to the previous agreement. These enhancements ultimately provide additional financial flexibility and leave us in a much stronger position. At the end of the second quarter, we had a total balance of $2.7 billion on the revolving line of credit, term loans and notes. The leverage ratio, as defined in the credit agreement, stands at approximately 3.1 times, which is down from 3.5 times at the end of 2019. Leverage decreased based on the new calculation containing the amendments to the credit facility, which allows the company to reduce gross debt by the full amount of corporate cash. To end the call, we remain optimistic about the second half of the year based on the current volume trends outlined by Melissa. That being said, future projections remain unpredictable due to the volatile nature of the pandemic. For this reason, we are not in a position to provide guidance at this time. And now we will open the line for questions.

Your first question comes from Ashish Sabadra with Deutsche Bank.

Hi. Thanks for taking my question. Good to see the improvement in the Fleet volume in July. I was just wondering, if you can talk about the verticals within the North American local market? And if you could also comment on any potential sensitivity to potential slowdown in the economy from the surge in the pandemic? How should we think about that going forward? Thanks.

Yes, of course. Let me provide you with more insight into the trends we're observing. As you've noted, we are encouraged by the improvement we've seen. There was significant progress in our fleet trends from April to July, although some shifts began to occur. In April, the impact varied greatly across different states in the U.S., particularly those most affected by COVID, which experienced notably worse conditions compared to others. Over the quarter, state activities began to align, resulting in less variation based on state and more on the specific industry classification. Most of our customer base consists of essential services that have continued to operate. As the economy improves, we are witnessing a gradual resurgence of nonessential sectors. The areas where we still observe significant weakness are primarily in retail and sales fleets utilizing our products, as well as some service-related sectors like finance and insurance. Overall, the trends are increasingly industry-specific. On a positive note, the construction sector has performed quite well, particularly in areas related to road work and government-funded construction projects. Additionally, recent observations indicate that even the U.S. states more adversely affected by COVID are beginning to show trends similar to other states, and we are not currently seeing any exacerbated effects linked to COVID-related activities across the country.

That's very helpful color. And then maybe just a quick question on the corporate payments. Pretty good volume growth, 6% growth in July. And you also talked about the FIS adoption of the bill payment solution. Can you just talk about the pipeline for that business and the demand for B2B payments in general?

Yes, we're really excited about the pipeline we have in corporate payments. In the recent quarter leading up to July, we noticed a lot of variation. In corporate payments, the fintech-related customers in our portfolio grew over 20%, while the channel we have with financial institutions saw single-digit growth even in that quarter. The areas experiencing softness were the smaller accounts with direct customer relationships and bill pay. However, we began to see some improvement in those trends in July. We're very enthusiastic about our relationship with FIS on Bill Pay; it’s a solid partnership that we aim to strengthen over time. Overall, we're excited about our pipeline in corporate payments, which is looking strong compared to a year ago.

Thanks, Melissa. That was very helpful.

Your next question comes from the line of Tien-Tsin Huang with JP Morgan.

Thank you very much for the slides. It seems that the main difference compared to our model was that processing costs increased by 1%, whereas other businesses experienced declines. I'm just trying to understand why that happened. Was there anything unusual contributing to this?

Tien-Tsin, well, let me recap first on the cost containment, and then I can dig in a bit more on the processing cost. So as Melissa said in her remarks, we wanted to protect especially the U.S. health investments as well as the tech investments. And on the processing cost line, the majority of the expenses that we have are related to tech ops, IT, and then obviously, call center and everything related to credit and collections. So as you think about what we have been doing in the quarter, there's two things. We have kept investing in the areas where we wanted to continue investing, and we have also moved some resources from the sales and marketing line into the processing cost to help on the cash collection initiatives that we put in place. So when you put everything together, this is why you see it being flat. But if you look compared to Q1, we are approximately $4 million to $5 million down sequentially. So obviously, the volume has also had a small impact on that area as well.

I see. That makes sense. Thanks for going through that. Just as my quick follow-up for Melissa then, you guys have a few fleet wins here. Any way to talk about your sales pipeline or quantify your bookings growth, that kind of idea? Just curious how you've adapted on the selling front and what demand looks like? Thanks.

Yes. I'm really proud of our sales and marketing teams because they have adapted really quickly to this environment. And if you look at the pipelines, we said last quarter our over-the-road pipeline was stronger than year ago. I'd see that's still true. North American fleet has been a little bit lower than what we've seen historically. But if you combine the two, they look pretty much on par. And then on top of that, if you kind of go across the business, our health pipeline looks stronger than it has in the past. Our corporate payments pipeline looks stronger than it has in the past. So across the business, we have learned how to migrate, how to sell differently. And we migrated our dollars and our time accordingly, based on the environment that we're in. And we feel really good about the wins that we were able to talk about this quarter, really across every part of our business, we've got some really great names that we can talk about, that are going to get implemented in the course of this year or have already started to implement.

Terrific for you. Thanks for the update.

Our next question comes from the line of Steven Wald with Morgan Stanley.

Thank you for taking my question. I hope everyone is staying safe and healthy. I'm aware that you can't comment on the eNett and Optal deal at this time, but conceptually, considering your previous stance in April about not being obligated to close the deal, I'm curious if you've thought about the global reopening and developments in other regions that might lead you to consider closing the deal regardless of court rulings.

I don't think it's really appropriate for us to discuss that transaction or the substance of the litigations at this time. And all I'm going to say is, I'll just reinforce our confidence that we have in the position that we've put forward. And if you look at what's happened over the course of the last quarter and say, if anything, we feel more confident than we did a quarter ago.

Completely understood. I had to try there. Maybe just switching gears toward the outlook and the trends you guys outlined since the end of the quarter. I understand that it's still a very influx environment, and so ascribing a guide at this point is still very difficult. But if you were to sort of plot the line, as you guys did, of the improvement in trends across the different businesses, if you were to improve at this rate without sort of major disruptions, it sort of looks like you'd be back in the positive territory on at least transaction volume growth by sometime in mid- or early fourth quarter. And I guess I'm curious, if that's your sense of things, even if you're not willing to describe as a formal guidance to that outlook, just given the uncertainty around it?

I don't think anyone really knows precisely what to expect and what's going to happen with volume trends. What we're trying to do is be as transparent as we can to show you the trends we're seeing week over week. We certainly have seen some pretty substantial improvement over the course of the quarter. And what we would say right now is, we're seeing it minimally. Minimally we're seeing stability. In some areas, it's certainly better than that. And in my other points that I've made is, two things I'd call out is, if you look at, again, the states that are being more impacted by COVID, we're not really seeing a big impact right now, which I think is important as we're thinking about what's going to happen over the next couple of months. And then some of the trends we're seeing, we've been asked a lot in the past between small and large customers. And we are seeing some divergence in small customer behavior. With the over-the-road business, in particular, you're seeing larger over-the-road fleets recovering faster than some of the smaller over-the-road fleet customers. In the North American fleet business, it's actually a little bit less clear. The smaller businesses have held up really well. And so, one of the things that we're just watching is what happens with stimulus money and how that is going to impact some of that, ultimately, customer behavior. But right now, again, we're providing transparency, so you can see what we see in terms of volume trends.

Of course. We definitely appreciate that transparency, and that's helpful color on the underlying pieces. Thank you.

Your next question comes from the line of Ramsey El-Assal with Barclays.

Hey. Thanks for taking my question today. I wanted to ask you about the OMV private-label contract. And I know this is a question that used to get asked a little more than it has recently. But do you see COVID potentially opening up the pipeline in Europe for more kind of outsourcing deals like that? That used to be kind of a theme that folks thought was coming and it sort of ceased up for a while. Has there been any perceptible change in the kind of pipeline or sales activity in Europe on these outsourcing contracts?

Yes. I've always described the European fleet pipeline as the longest cycle we've ever experienced. I don't believe it relates to COVID. Currently, these cycles tend to be quite lengthy. We have excellent technology available to our customers. The main issue is the motivation to change and migrate. Once they reach a stage where they are ready to make a change, we feel confident that we have a strong competitive offering.

In fact, the OMV transaction, I mean, we started the process much earlier than COVID started. So probably has nothing to do with that.

I understand. I have a question about the potential impact of COVID on the business. There has been a significant shift at the front end, especially in retail, particularly with more direct-to-consumer digital purchasing. Are you observing any changes on the back end of those purchases, such as trucking patterns? Are there fewer goods being shipped from warehouses to retail locations? Are there any other infrastructure changes you’re noticing that align with the changes in the consumer experience? I realize this is a complex question, but I wanted to ask.

No. I definitely acknowledge that there are changes occurring, though I'm not sure if they will be long-lasting or if they are simply a reaction to the current environment. Within our portfolio, some customers have experienced an increase of 180% compared to the previous year, while others have seen declines. In the over-the-road sector, companies working with online retailers are observing significantly higher volumes. Additionally, there is a strong demand for refrigerated diesel, which we believe is linked to grocery store activities. This situation has various effects, whether upstream or downstream, related to the over-the-road customer base and retail trends.

But net-net, it's a wash, effectively? You're picking up both sides of it, so it's not a headwind or a tailwind. It's just a shift, sort of?

I believe this is why the over-the-road business has shown more resilience. When we analyze the various fleet markets we operate in, we note that the over-the-road business was up year-over-year in July. This growth can be attributed to the advantages gained from new shipping areas. However, this benefit is not felt universally; some customers are gaining significantly while others continue to experience declines.

OK. Got it. Thanks so much I appreciate it.

Your next question comes from the line of Peter Christiansen with Citi.

Morning. Thanks for taking my question. I was hoping you could give us a little more color on what you're seeing in terms of your credit lines in the last quarter? I know there was some trimming earlier in the year. What kind of trends do we see in 2Q? And do you anticipate those further contraction along lines going forward? And then just a quick one. It would be helpful, if you could tell us the organic decline, excluding fuel and FX that would be helpful. Thank you.

Sure. I'll start on credit, and I'm sure Roberto will jump in here. But we're pretty active. And I'd say, kind of the theme for the quarter for us was to move fast across a number of fronts, and one of them was related to credit. And so we took down a number of different credit lines. It's about $2 billion worth of action that we took. And at the same time, we've been working with our customer base to make sure that we are thoughtful about how we're approaching those conversations with our customers. I think you can see that kind of the net-net of that with really strong customer retention rates. And at the same time, we've been able to reduce the overall credit exposure that we've had. The benefit of that we've seen roll through so far in our aging, and Roberto talked about that a little bit. If you want to talk about it more, Roberto?

Yes. Starting with what Melissa mentioned regarding the measures we've implemented, when discussing processing costs, we have also shifted some resources from sales and marketing to credit and collections. Overall, the credit losses for this quarter and the performance of account receivable aging indicate that we are in a solid position. Our receivables have decreased by over $700 million since December. In terms of numbers, we reported more than $40 million in credit losses for Q1 this year, which is positive. In the travel segment, credit losses this quarter amounted to $2 million, and our receivable balance is quite small, significantly reducing our risk exposure. In the fleet segment, credit losses have also decreased by approximately $2.5 million from Q1 to Q2. These signs suggest that the measures we have implemented and the resources we have reallocated are yielding positive results. Additionally, the aging buckets, which are key indicators of how receivables are performing, were in good shape by the end of June.

And then your question around our growth. We talked about the impact of fuel prices were about $29 million in the quarter and you had a couple million dollar impact for foreign exchange rates. The growth rate, excluding FX and EPG, was negative 15%.

And the inorganic contribution from Go Fuel Card ...

Yes, it was very little. It was... Very small. It's only the EG acquisition. It's negligible.

That's helpful. Thank you so much.

Your next question comes from the line of Sanjay Sakhrani with KBW.

Thanks. Good morning. I'm glad you guys are doing well. I guess I wanted to follow-up on Tien-Tsin's question related to some of the wins that you have in fleet and sort of think about how we think the progression in fleet will unfold over the remainder of the year. So the expectation that things are stable to gradual, is that before those new relationships come on? And is there a positive impact related to those new relationships?

Yes, you can see actually even now, there's a positive to the accounts that we're winning. And I talked about same-store sales were down 21%, but our transactions were down 17%. So there's a big headwind with the macro that's there, but we're actually continuing to win new business and implement new business that fits into our portfolio. And we're able to talk about some of these accounts because they're a larger name. But in the background, there's also a number of smaller accounts that we're rolling into the portfolio in any given quarter.

But these are ones that you had on Slide 5, I guess, like, are those larger? And should we see a positive, a more positive noticeable impact?

Yes. If you're talking about fleet specifically, so OMV and J.B. Hunt, think of those as rolling in toward the end of the year. So you would see them having more of an impact into next year, a little bit at the end of the year, more of an impact later. Where FIS and Transamerica, you'll see them a little bit sooner.

Got it. And then Melissa, you mentioned some of the workforce reductions and the U.S. kind of relatively being unscathed. I guess as we look forward and should continue weakness persist, are there plans for further cost reductions, especially if we have another surge in cases?

When we actually came up with our plan, we wanted to move fast, we wanted to be decisive around making some really tough choices. And so we've made some choices on what to do with the workforce, both here in the U.S. and then internationally. We also made a lot of choices on where we want to spend our money, both in terms of our current spend and our capital investments going forward. It was with an eye of balancing the desire to slow down some of the costs that we have within the company, but also making sure that we can maintain the long-term growth trajectory. And we feel good about the trade-off choices that we've made on that path. And that's a conversation we'll continue to have on a quarterly basis, where we just look and say, are there places we should reallocate money in order to make sure that we're taking advantage of future opportunities and or other places we should slow things down? But we feel pretty confident right now around the changes that we've made, that we've struck a pretty good balance of that.

Great. Just one last question regarding the liquidity raised this quarter. Excluding eNett, how do you feel about your current position? Should we assume you're not pursuing any deals, or are you exploring other acquisition opportunities?

Well, it's hard for us to say we're ever out of the market. We're active in numbers and processes. It's a pretty slow market right now in general, because of the level of uncertainty. And we certainly want to see through the litigation and get more clarity around the outcome. With eNett and Optal, so that would affect the timing of whether or not in what we chose to do.

Yes. What I will add is, for us, what was important was to be in the position where we are today. And we have over $1.7 billion of liquidity. And as the eNett and Optal unwinds, we will be in a much better position to decide what other alternatives now we want to pursue as things start to improve.

Thank you. And a couple on segment Travel and Corporate Solutions, the $54 million of revenue, how much of that was Corporate Solutions versus Travel?

About 30% was Travel and 70% was, I think, AP-related.

OK. That's helpful. Are you noticing any increase in Travel? It wasn't clear in July, but perhaps with some of your partners, local travel in the U.S. might be seeing more activity with some of your online travel companies?

So global travel spend was down about 90% in April and down about 81% in July. So just a little bit of info.

OK. The healthcare sector, the $88 million of revenue, how much of that was from COBRA?

It's still a piece we haven't disclosed historically. It's still a relatively small portion.

If you were to finalize the eNett deal, are you confident in your capital situation? In a worst-case scenario, there might be other options like restructuring the deal, but if you had to proceed under the terms agreed before the pandemic, do you believe you have the necessary capital to close that deal? What is the current run rate?

Yes. As I mentioned earlier, our current liquidity position is likely one of the strongest in the company's history, exceeding $1.7 billion. Additionally, our leverage ratio is at 3.1%, which is the lowest it has been in the last four years, prior to the EFS transaction. We have been exploring various options to ensure we can handle any situation regarding the transaction. I can assure you that we are in an excellent position both in terms of cash and liquidity. Furthermore, we have the backing of our banks, as we have amended our credit facility again, demonstrating their strong support for WEX. If we need to proceed with the closing, we have numerous alternatives available, including utilizing our current liquidity and raising new debt. Overall, we feel very confident about our current situation.

Is that 3.1, the Warburg deal closed after the quarter. Does that include the capital from Warburg?

It does not. The Warburg transaction, due to the new credit agreement, consists of two parts: a $90 million investment in common stock and a $310 million unsecured note. The unsecured note will not affect our leverage, while the $90 million will provide additional corporate cash that will improve our leverage ratio. With that $90 million, we would be at 2.9 at the end of Q2, but it is not included in the balance sheet calculation for the quarter's end.

Thank you. Just last quick one is, Melissa, do you see opportunities to accelerate growth coming out of this pandemic? I mean assuming that the world gets back to normal over the next 12 to 18 months, are you seeing opportunities to accelerate?

Yes. And that's a big part of our focus right now is making sure that we're well positioned. And if you look at some of the products that we have on one of the slide deck fits with the idea that we want to make sure that we're continuing to build upon the technology that we have. We've been really leaning into the digital world, anyway, over the last several years. And so we're just doubling down in that arena and then extending the products that we have through new use cases where people can buy more. So we think the combination of the work that we've done over the last several years and then the product set with some of the new add-ons that we're developing right now, puts us in a really good position. You can see that in health, you can see the wins that we're having in the momentum that we're having. We got some really great pipelines across the rest of the business, and you're seeing adoption of some of these new products we have out there. So yes, we feel good about our position.

Thank you. Appreciate it.

We have reached our allotted time for questions. I would now like to turn the call back to Mr. Elder for closing remarks. Thank you, everyone, and thank you for hanging with us as we went a few minutes long. We had a lot to say apparently this quarter. So we look forward to catching up with you in a few months and reporting on our progress then. So thank you. And this concludes today’s conference call. You may now disconnect.