CORPAY, INC. (CPAY)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with

the consolidated financial statements and related notes appearing elsewhere in this report. In addition to historical information,

this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual

results to differ materially from management’s expectations. Factors that could cause such differences include, but are not

limited to, those identified below and those described in Item 1A “Risk Factors” appearing elsewhere in this report. All foreign

currency amounts that have been converted into U.S. dollars in this discussion are based on the exchange rate as reported by

Oanda for the applicable periods.

The following discussion and analysis of our financial condition and results of operations generally discusses 2024 and 2023

items, with year-over-year comparisons between these two years. A detailed discussion of 2023 items and year-over-year

comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-

K for the year ended December 31, 2023.

Executive Overview

Effective March 25, 2024, FLEETCOR Technologies, Inc. changed its corporate name to Corpay, Inc. At that time, we ceased

trading under the ticker symbol "FLT" and began trading under our new ticker symbol, "CPAY", on the New York Stock

Exchange (NYSE). Corpay is a global corporate payments company that helps businesses and consumers better manage and

pay their expenses. Corpay's suite of modern payment solutions help customers better manage vehicle-related expenses (e.g.,

fueling, tolls, car registration and parking), lodging expenses (e.g., hotel and extended stay bookings) and corporate payments

(e.g., domestic and international accounts payable and point of sale purchases).  This results in our customers saving time and

ultimately spending less. Since its incorporation in 2000, Corpay has delivered payment and spend solutions with customized

controls and robust capabilities that offer our customers a better way to pay.

Businesses spend an estimated $145 trillion each year in transactions with other businesses. In many instances, businesses lack

the proper tools to monitor what is being purchased and employ manual, paper-based, disparate processes and methods to both

approve and make payments for their business-to-business purchases. This often results in wasted time and money due to

unnecessary or unauthorized spending, fraud, receipt collection, data input and consolidation, report generation, reimbursement

processing, account reconciliations, employee disciplinary actions and more.

Corpay’s vision is that every payment is digital, every purchase is controlled and every related decision is informed. Digital

payments are faster and more secure than paper-based methods such as checks and provide timely and detailed data that can be

utilized to effectively reduce unauthorized purchases and fraud, automate data entry and reporting, and eliminate reimbursement

processes. Combining this payment data with analytical tools delivers insights, which managers can use to better run their

businesses. Our wide range of modern, digitized solutions generally provides control, reporting and automation benefits

superior to many of the payment methods businesses often use such as cash, paper checks, general purpose credit cards, as well

as employee pay and reclaim processes.

Russia Disposition

We completed the sale of our Russia business on August 15, 2023. The sale included the entirety of our operations in Russia

and resulted in a complete exit from the Russia market. We received total proceeds, net of cash disposed and net of a

$5.6 million foreign exchange loss upon conversion of the ruble-denominated proceeds to U.S. dollars, of $197.0 million,

which have been recorded within investing activities in the accompanying Consolidated Statements of Cash Flows for the year

ended December 31, 2023. In connection with the sale, we recorded a net gain on disposal of $13.7 million during the year

ended December 31, 2023, which represents the proceeds received less the derecognition of the related net assets, the

reclassification of accumulated foreign currency translation losses, and the foreign exchange loss upon conversion of the ruble-

denominated proceeds to U.S. dollars.

Exclusive of the impact of disposition, our business in Russia accounted for approximately $62.0 million of our income before

income taxes for the year ended December 31, 2023.

Comdata Merchant Solutions Disposition

In May 2024, we signed a definitive agreement to sell the  merchant solutions business, a business within the U.S. division of

our Vehicle Payments segment (the "disposal group") to a third party. The transaction was completed during December 2024.

The disposal group's assets and liabilities were recorded at their carrying value. Goodwill of approximately $58.2 million was

allocated to the carrying value of the disposal group based on a relative fair value analysis.

We received total proceeds of $185.5 million, which have been recorded within investing activities in the accompanying

Consolidated Statements of Cash Flows. In connection with the sale, we recorded a net gain on disposal of $121.3 million

during the year ended December 31, 2024, which represents the proceeds received less the derecognition of the related net

assets.

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Results

Revenues, net, Net Income Attributable to Corpay and Net Income Per Diluted Share Attributable to Corpay. Set forth below

are revenues, net, net income attributable to Corpay and net income per diluted share attributable to Corpay for the years ended

December 31, 2024 and 2023 (in millions, except per share amounts).

Adjusted Net Income Attributable to Corpay, Adjusted Net Income Per Diluted Share Attributable to Corpay, Adjusted

EBITDA and Adjusted EBITDA margin. Set forth below are adjusted net income attributable to Corpay, adjusted net income

per diluted share attributable to Corpay, EBITDA, adjusted EBITDA and adjusted EBITDA margin for the years ended

December 31, 2024 and 2023 (in millions, except per share amounts and percentages).

Adjusted net income attributable to Corpay, adjusted net income per diluted share attributable to Corpay, adjusted EBITDA and

adjusted EBITDA margin are supplemental non-GAAP financial measures of operating performance. See the heading entitled

“Management’s Use of Non-GAAP Financial Measures” for more information and a reconciliation of the non-GAAP financial

measure to the most directly comparable financial measure calculated in accordance with U.S. generally accepted accounting

principles, or GAAP. We use adjusted net income attributable to Corpay, adjusted net income per diluted share attributable to

Corpay, adjusted EBITDA and adjusted EBITDA margin to eliminate the effect of items that we do not consider indicative of

our core operating performance on a consistent basis. These non-GAAP measures are presented solely to permit investors to

more fully understand how our management assesses underlying performance and are not, and should not be viewed as, a

substitute for GAAP measures and should be viewed in conjunction with our GAAP financial measures.

Sources of Revenue

Corpay offers a variety of payment solutions that help to simplify, automate, secure, digitize and effectively control the way

businesses and consumers manage and pay their expenses. We provide our payment solutions to our business, merchant,

consumer and payment network customers in more than 200 countries around the world today, although we operate primarily in

three geographies, with approximately 81% of our business in the U.S., Brazil and the U.K. Our customers may include

commercial businesses (obtained through direct and indirect channels) and partners for whom we manage payment programs,

as well as consumers.

We report information about our operating segments in accordance with the authoritative guidance related to segments. We

manage and report our operating results through the following three reportable segments: Vehicle Payments, Corporate

Payments and Lodging Payments. The remaining results are included within Other, which includes our Gift and Payroll Card

businesses. These segments align with how the Chief Operating Decision Maker (CODM) allocates resources, assesses

performance and reviews financial information.

Our revenue is generally reported net of the cost for underlying products and services purchased. In this report, we refer to this

net revenue as “revenue" or "revenues, net". See “Results of Operations” for additional segment information.

Revenues, net, by Segment. For the years ended December 31, 2024 and 2023, our segments generated the following revenues,

net (in millions):

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*Columns may not calculate due to rounding. Other includes our Gift and Payroll card operating segments.

We generate revenue in our Vehicle Payments segment through a variety of program fees, including transaction fees, card fees,

network fees and charges, as well as from interchange. These fees may be charged as fixed amounts, costs plus a mark-up,

based on a percentage of the transaction purchase amounts, or a combination thereof. Our programs also include other fees and

charges associated with late payments and based on customer credit risk. We also generate float revenue earned on invested

customer funds in jurisdictions where permitted.

In our Corporate Payments segment, our payables business primarily earns revenue from the difference between the amount

charged to the customer and the amount paid to the third party for a given transaction, as interchange or spread revenue. Our

programs may also charge fixed fees for access to the network and ancillary services provided. Revenues from risk

management products and foreign exchange payment services are primarily comprised of the difference between the exchange

rate we set for the customer and the rate available in the wholesale foreign exchange market. In our cross-border payments

business, the majority of revenue is from exchanges of currency at spot rates, which enables customers to make cross-currency

payments. Our cross-border payments business also derives revenue from our risk management business, which aggregates

foreign currency exposures arising from customer contracts and economically hedges the resulting net currency risks by

entering into offsetting contracts with established financial institution counterparties. Our performance obligation in our foreign

exchange payment services is providing a foreign currency payment to a customer’s designated recipient and therefore, we

recognize revenue on foreign exchange payment services when the underlying payment is made. We also generate float revenue

earned on invested customer funds in jurisdictions where permitted.

In our Lodging Payments segment, we primarily earn revenue from the difference between the amount charged to the customer

and the amount paid to the hotel for a given transaction or based on commissions paid by hotels. We may also charge fees for

access to the network and ancillary services provided.

The remaining revenues represent other solutions in our Gift and Payroll card businesses, referred to as Other. In these

businesses, we primarily earn revenue from the processing of transactions. We may also charge fees for ancillary services

provided.

Revenues, net, by Geography Revenues, net by geography for the years ended December 31, 2024 and 2023, were as follows

(in millions):

*Columns may not calculate due to rounding. Disclosure has been conformed in all periods to align with current

presentation, which is based on the geographic location of the legal entity.

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Revenues, net, by Key Performance Metric and Organic Growth. Revenues, net by key performance metric and organic

growth by segment for the years ended December 31, 2024 and 2023, were as follows (in millions except revenues, net per key

performance indicator)*:

Revenue per relevant key performance indicator (KPI), which may include transactions, spend volume, room nights, or other

metrics, is derived from the various revenue types as discussed above and can vary based on geography, the relevant merchant

relationship, the payment product utilized and the types of products or services purchased, the mix of which would be

influenced by our acquisitions, organic growth in our business and the overall macroeconomic environment, including

fluctuations in foreign currency exchange rates, fuel prices and fuel price spreads. Relevant KPI is derived by broad product

type and may differ from how we describe the business. Revenue per KPI per customer may change as the level of services we

provide to a customer increases or decreases, as macroeconomic factors change and as adjustments are made to merchant and

customer rates. See “Results of Operations” for further discussion of transaction volumes and revenue per transaction.

Organic revenue growth is a supplemental non-GAAP financial measure of operating performance. Organic revenue growth is

calculated as revenue growth in the current period adjusted for the impact of changes in the macroeconomic environment (to

include fuel price, fuel price spreads and changes in foreign exchange rates) over revenue in the comparable prior period

adjusted to include or remove the impact of acquisitions and/or divestitures and non-recurring items that have occurred

subsequent to that period. See the heading entitled “Management’s Use of Non-GAAP Financial Measures” for more

information and a reconciliation of the non-GAAP financial measure to the most directly comparable financial measure

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calculated in accordance with GAAP. We believe that organic revenue growth on a macro-neutral and consistent acquisition/

divestiture/non-recurring item basis is useful to investors for understanding the performance of Corpay.

Sources of Expenses

We routinely incur expenses in the following categories:

•Processing—Our processing expenses consist of expenses related to processing transactions, servicing our customers

and merchants, credit losses and cost of goods sold related to our hardware and card sales in certain businesses.

•Selling—Our selling expenses consist primarily of wages, benefits, sales commissions (other than merchant

commissions) and related expenses for our sales, marketing and account management personnel and activities.

•General and administrative—Our general and administrative expenses include compensation and related expenses

(including stock-based compensation and bonuses) for our employees, finance and accounting, information

technology, human resources, legal and other administrative personnel. Also included are facilities expenses, third-

party professional services fees, travel and entertainment expenses and other corporate-level expenses.

•Depreciation and amortization—Our depreciation expenses include depreciation of property and equipment,

consisting of computer hardware and software (including proprietary software development amortization expense),

card-reading equipment, furniture, fixtures, vehicles and buildings and leasehold improvements related to office space.

Our amortization expenses include amortization of intangible assets related to customer and vendor relationships, trade

names and trademarks, software and non-compete agreements. We are amortizing intangible assets related to business

acquisitions and certain private label contracts associated with the purchase of accounts receivable.

•Other operating, net—Our other operating, net includes other operating expenses and income items that do not relate

to our core operations or that occur infrequently.

•Other expense (income), net—Our other expense (income), net includes gains or losses from the following: foreign

currency transactions, extinguishment of debt and investments. This category also includes other miscellaneous non-

operating costs and revenue. Certain of these items may be presented separately on the Consolidated Statements of

Income.

•Interest expense, net—Our interest expense, net includes interest expense on our outstanding debt, interest income on

cash balances and interest on our interest rate and cross-currency swaps.

•Provision for income taxes—Our provision for income taxes consists of corporate income taxes related primarily to

profits resulting from the sale of our products and services on a global basis.

Factors and Trends Impacting our Business

We believe that the following factors and trends are important in understanding our financial performance:

•Global economic conditions—Our results of operations are materially affected by conditions in the economy generally,

in North America, Brazil, the U.K. and in other locations internationally. Factors affected by the economy include our

transaction volumes, the credit risk of our customers and changes in tax laws across the globe. These factors affected

our businesses in each of our segments.

•Foreign currency changes—Our results of operations are significantly impacted by changes in foreign currency

exchange rates; namely, by movements of the Australian dollar, Brazilian real, British pound, Canadian dollar, Czech

koruna, euro, Mexican peso, New Zealand dollar and Russian ruble (for periods prior to the disposition of our Russia

business), relative to the U.S. dollar. Approximately 52% and 54% of our revenues in 2024 and 2023, respectively,

were derived in U.S. dollars and were not affected by foreign currency exchange rates. See “Results of Operations” for

information related to foreign currency impact on our total revenues, net.

Our cross-border foreign risk management business aggregates foreign currency exposures arising from customer

contracts and economically hedges the resulting net currency risks by entering into offsetting contracts with

established financial institution counterparties. These contracts are subject to counterparty credit risk and liquidity risk

from collateral calls.

We further manage the impact of economic changes in the value of certain foreign-denominated net assets by utilizing

cross currency interest rate swaps. See "Liquidity and capital resources" below for information regarding our cross

currency interest rate swaps.

•Fuel prices—Our Vehicle Payments customers use our products and services primarily in connection with the

purchase of fuel. Accordingly, our revenue is affected by fuel prices, which are subject to significant volatility. A

change in retail fuel prices could cause a decrease or increase in our revenue from several sources, including fees paid

to us based on a percentage of each customer’s total purchase. Changes in the absolute price of fuel may also impact

unpaid account balances and the late fees and charges based on these amounts. We estimate approximately 8% and

10% of revenues, net were directly impacted by changes in fuel price in 2024 and 2023, respectively. See "Results of

Operations" for information related to the fuel price impact on our total revenues, net.

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•Fuel price spread volatility—A portion of our revenue involves transactions where we derive revenue from fuel price

spreads, which is the difference between the price charged to a fleet customer for a transaction and the price paid to the

merchant for the same transaction. In these transactions, the price paid to the merchant is based on the wholesale cost

of fuel. The merchant’s wholesale cost of fuel is dependent on several factors including, among others, the factors

described above affecting fuel prices. The fuel price that we charge to our customer is dependent on several factors

including, among others, the fuel price paid to the merchant, posted retail fuel prices and competitive fuel prices. We

experience fuel price spread contraction when the merchant’s wholesale cost of fuel increases at a faster rate than the

fuel price we charge to our customers, or the fuel price we charge to our customers decreases at a faster rate than the

merchant’s wholesale cost of fuel. The inverse of these situations produces fuel price spread expansion. We estimate

approximately 5% of revenues, net were directly impacted by fuel price spreads in both 2024 and 2023. See "Results

of Operations" for information related to the fuel price impact on our total revenues, net.

•Acquisitions—Since 2002, we have completed over 100 acquisitions of companies and commercial account

portfolios. Acquisitions have been an important part of our growth strategy, and it is our intention to continue to seek

opportunities to increase our customer base and diversify our service offering through further strategic acquisitions.

The impact of acquisitions has, and may continue to have, a significant impact on our results of operations and may

make it difficult to compare our results between periods.

•Interest rates—From January 1, 2023 to July 27, 2023, the U.S. Federal Open Market Committee increased the target

federal funds rate four times for a total rate increase of 1.00%, and on September 18, 2024, November 7, 2024 and

December 18, 2024, lowered the target federal funds rate by 0.50%, 0.25% and 0.25%, respectively. Additional rate

changes are possible in future periods. We are exposed to market risk changes in interest rates on our debt, particularly

in rising interest rate environments, which is partially offset by incremental interest income earned on cash and

restricted cash. As of December 31, 2024, we have a number of receive-variable SOFR, pay-fixed interest rate swap

derivative contracts with a cumulative notional U.S. dollar value of $4.5 billion. The objective of these contracts is to

reduce the variability of cash flows in the previously unhedged interest payments associated with variable rate debt,

the sole source of which is due to changes in SOFR benchmark interest rate.

See the "Liquidity and capital resources" section below for additional information regarding our derivatives.

•Expenses—Over the long term, we expect that our expenses will decrease as a percentage of revenues as our revenues

increase, except for expenses related to transaction volume processed. To support our expected revenue growth, we

plan to continue to incur additional sales and marketing expense by investing in our direct marketing, third-party

agents, internet marketing, telemarketing and field sales force.

•Income Taxes—We pay taxes in various taxing jurisdictions, including the U.S., most U.S. states and many non-U.S.

jurisdictions. The tax rates in non-U.S. taxing jurisdictions are different than the U.S. tax rate. Consequently, as our

earnings fluctuate between taxing jurisdictions, our effective tax rate fluctuates. Our effective tax rate is also subject to

fluctuations driven by the impact of discrete tax items.

The Organization for Economic Co-operation and Development (OECD), continues to put forth various initiatives,

including Pillar Two rules which introduce a global minimum tax at a rate of 15%. European Union member states

agreed to implement the OECD’s Pillar Two rules with effective dates of January 1, 2024 and January 1, 2025 for

different aspects of the directive, and most have already enacted legislation. A number of other countries are also

implementing similar legislation. As of December 31, 2024, based on the countries in which we do business that have

enacted legislation effective January 1, 2024, the impact of these rules to our financial statements was not material.

This may change as other countries enact similar legislation and further guidance is released. We are currently

evaluating the impact of the enacted legislation effective January 1, 2025 to our financial statements and continue to

closely monitor regulatory developments to assess potential impacts.

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Acquisitions, Investments and Dispositions

Each of these acquisitions provide incremental geographic expansion of our products and broaden our strategies within each of

our business segments.

2025

•In February 2025, we signed a definitive agreement to acquire 100% of Gringo, a leading Brazil-based vehicle

registration and compliance payment company, for approximately $147.0 million, net of cash of approximately $22

million. Gringo's digital app and national network help drivers in Brazil pay vehicle taxes, registration and fines. The

transaction is expected to close in the first quarter of 2025, subject to regulatory approval and standard closing

conditions and will be reflected in our Vehicle Payments segment.

2024

•In March 2024, we acquired 70% of Zapay, a Brazil-based digital mobility solution for paying vehicle-related taxes

and compliance fees, for approximately $59.5 million, net of cash. As part of the agreement, we have the right to

acquire the remainder of Zapay in four years. The majority investment in Zapay further scales our Vehicle Payments

business in Brazil.

•In July 2024, we acquired 100% of Paymerang, a U.S. based leader in accounts payables automation solutions, for

approximately $179.2 million, net of cash and cash equivalents and restricted cash acquired of $309 million. The

acquisition expands our presence in several market verticals, including education, healthcare, hospitality and

manufacturing. Results from Paymerang are reported in our Corporate Payments segment.

•In December 2024, we acquired 100% of GPS Capital Markets, LLC ("GPS") for approximately $576.2 million, net of

cash and cash equivalents and restricted cash acquired of $190.7 million. GPS provides business-to-business cross-

border and treasury management solutions to upper middle market companies, primarily in the U.S. Results from GPS

are reported in our Corporate Payments segment.

•In December 2024, we disposed of our merchant solutions business for $185.5 million, net of cash disposed. Results

from our merchant solutions business were previously included in our Vehicle Payments segment.

•During the year ended December 31, 2024, we also completed asset acquisitions for approximately $6.7 million.

2023

•In January 2023, we acquired Global Reach, a U.K.-based cross-border payments provider, for approximately

$102.9 million, net of cash. Results from Global Reach are reported in our Corporate Payments segment.

•In February 2023, we acquired the remainder of Mina Digital Limited, a cloud-based electric vehicle (EV) charging

software platform, and we also acquired Business Gateway AG, a European-based vehicle maintenance provider, for a

total of approximately $23.8 million, net of cash. Results from Mina Digital Limited and Business Gateway AG are

reported in our Vehicle Payments segment.

•In September 2023, we acquired PayByPhone Technologies, Inc. a global parking payment application, for

approximately $301.9 million, net of cash. Results from PayByPhone are reported in our Vehicle Payments segment.

•In the third quarter of 2023, we disposed of our Russian business for $197.0 million, net of cash disposed and net of a

$5.6 million foreign exchange loss upon the conversion of the ruble-denominated proceeds to U.S. dollars. Results

from our Russian business were previously included in our Vehicle Payments segment.

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Results of Operations

Year ended December 31, 2024 compared to the year ended December 31, 2023

The following table sets forth selected financial information from the consolidated statements of income for the years ended

December 31, 2024 and 2023 (in millions, except percentages)*.

*The sum of the columns and rows may not calculate due to rounding.

NM - not meaningful

Consolidated revenues, net

Consolidated revenues were $3,974.6 million in 2024, an increase of 5.8% compared to the prior year. The increase in

consolidated revenues was due primarily to organic growth of 8%, driven by increases in spend and transaction volumes,

implementation and ramping of new sales and business initiatives. Consolidated revenues also grew 2% from acquisitions

completed in 2023 and 2024. This growth was partially offset by approximately $81 million, or 2%, from the dispositions of

our Russia business in August 2023 and our merchant solutions business in December 2024, and by the negative impact of the

macroeconomic environment.

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Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a negative

impact of approximately $65 million on our consolidated revenues for 2024 over 2023, driven primarily by unfavorable foreign

exchange rates of approximately $41 million, mostly in our Brazil business, the unfavorable impact of fuel prices of

approximately $14 million and unfavorable fuel price spreads of approximately $10 million.

Consolidated operating expenses

Processing. Processing expenses were $869.1 million in 2024, an increase of 6.0% compared to the prior year. Increases in

processing expenses were primarily due to approximately $43 million of expenses related to acquisitions completed in 2023 and

2024, higher variable expenses driven by increased transaction volumes and investments to drive future growth. The increases

were partially offset by lower credit losses of $21 million due to our shift away from micro-SMB (small-medium business)

clients in the U.S., the impact of foreign exchange rates of approximately $11.0 million and the combined impact of the

dispositions of our Russia and merchant solutions businesses of approximately $4 million.

Selling. Selling expenses were $380.9 million in 2024, an increase of 12.0% compared to the prior year. Increases in selling

expenses were primarily due to increased commissions from higher sales volume and approximately $18 million of expenses

related to acquisitions completed in 2023 and 2024. The increases were partially offset by the impact of the dispositions of our

Russia and merchant solutions businesses of approximately $5 million and the impact of foreign exchange rates of

approximately $3 million.

General and administrative. General and administrative expenses were $616.9 million in 2024, an increase of 2.2% compared

to the prior year. Increases in general and administrative expenses were primarily due to approximately $28 million of expenses

related to acquisitions completed in 2023 and 2024 and higher stock-based compensation expense of approximately $5 million.

These increases were partially offset by lower overhead expense due to disciplined expense management, the impact of the

dispositions of our Russia and merchant solutions businesses of approximately $6 million and the impact of foreign exchange

rates of approximately $2 million.

Depreciation and amortization. Depreciation and amortization expenses were $351.1 million in 2024, an increase of 4.3%.

Increases in depreciation and amortization expenses were primarily due to incremental investments in capital expenditures in

addition to approximately $18 million of expenses related to acquisitions completed in 2023 and 2024. These increases were

partially offset by the impact of the dispositions of our Russia and merchant solutions businesses of approximately $3 million

and the impact of foreign exchange rates of approximately $4 million.

Goodwill impairment. During 2024, we recorded a non-cash goodwill impairment loss of $90.0 million, representing a partial

impairment of the goodwill within our Payroll Card reporting unit, which is a component of our "Other" category. See

additional discussion regarding this impairment, including factors leading to this conclusion, in the "Critical accounting

estimates" section below.

Gain on disposition of business. During 2024, we recognized a net gain of $121.3 million related to the December 2024

disposal of our merchant solutions business, a non-core business within the U.S. division of our Vehicle Payments segment.

Consolidated operating income

Operating income was $1,787.2 million in 2024, an increase of 7.9% compared to the prior year. The increase in operating

income was primarily due to the reasons discussed above.

Other expense (income), net. Other expense, net was $13.7 million in 2024, which primarily represents the impact of

fluctuations in foreign exchange rates on non-functional currency balances. Other income, net was $16.6 million in 2023, which

was primarily the net gain of approximately $13.7 million resulting from the disposal of our Russia business during the third

quarter of 2023.

Interest expense, net. Interest expense was $383.0 million in 2024, an increase of 9.9% compared to the prior year. The

increase in interest expense was primarily due to higher interest rates and increased borrowings for acquisitions and share

repurchases and lower interest income due to the sale of our Russia business. The following table sets forth the weighted

average interest rates paid on borrowings under our Credit Facility, excluding the related unused facility fees and swaps.

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We have a portfolio of interest rate swaps which are designated as cash flow hedges and cross-currency interest rate swaps,

which are designated as net investment hedges. During the years ended December 31, 2024 and 2023, as a result of these swap

contracts and net investment hedges, we recorded a benefit to interest expense, net of approximately $60.1 million and $48.4

million, respectively.

Provision for income taxes. The provision for income taxes and effective tax rate were $381.4 million and 27.5% in 2024,

compared to $343.1 million and 25.9% in the prior year. The increase in the provision for income taxes was driven primarily by

an increase in uncertain tax positions, an increase in valuation allowance on foreign net operating losses, the tax effect of a

nondeductible goodwill impairment and fewer foreign tax benefits. The increases were partially offset by an increase in excess

tax benefits on stock option exercises and state tax planning impacts.

Net income attributable to Corpay. For the reasons discussed above, our net income attributable to Corpay was $1,003.7

million in 2024, an increase of 2.2% compared to the prior year.

Segment Results

Vehicle Payments

Vehicle Payments revenues were relatively flat at $2.0 billion in 2024. Vehicle Payments revenues increased primarily due to

organic growth of 5% driven by new sales growth, and the impact of acquisitions, which contributed approximately $44 million

in revenues. These increases were partially offset by the dispositions of our Russia and merchant solutions businesses in August

2023 and December 2024, respectively, which lowered revenues by approximately $81 million, and the negative impact of the

macroeconomic environment of approximately $67 million. The negative macroeconomic environment was driven primarily by

unfavorable changes in foreign exchange rates on revenues of $43 million, unfavorable fuel prices of $14 million and

unfavorable fuel price spreads of approximately $10 million.

Vehicle Payments operating income was $1,076.9 million in 2024, an increase of 14.1% compared to the prior year due to the

reasons discussed above, as well as lower credit losses of approximately $26 million, as we shifted away from micro-SMB

clients toward higher credit quality customers in the U.S. in 2023.

Corporate Payments

Corporate Payments revenues were $1,221.9 million in 2024, an increase of 24.5% compared to the prior year. Corporate

Payments revenues increased primarily due to organic revenue growth of 20%, driven by a 15% growth in spend volume and

strong new sales in our payables and cross-border solutions. The Paymerang and GPS acquisitions contributed approximately

$36 million in revenue.

Corporate Payments operating income was $498.4 million in 2024, an increase of 30.4% compared to the prior year. Corporate

Payments operating income and margin increased primarily due to the reasons discussed above, as well as operating leverage

and integration synergies, as revenues grew faster than expenses, partially offset by higher selling expenses to grow the

business.

Lodging Payments

Lodging Payments revenues were $488.6 million in 2024, a decrease of 6.1% compared to the prior year. The decrease in

Lodging Payments revenues was primarily due to commissions recognized in the prior year in our insurance business that did

not recur in 2024, a decline in room nights in our airline and insurance businesses and a decline in revenue per room night in

our workforce business from the prior year.

Lodging Payments operating income was $223.4 million in 2024, a decrease of 12.1% compared to the prior year. Lodging

Payments operating income and margin declined from the prior period due to the reasons discussed above.

Other

Other revenues were $255.3 million in 2024, an increase of 1.8% compared to the prior year. Other operating loss was $11.5

million in 2024 as compared to operating income of $77.1 million in the prior year. The Other operating loss in 2024 was

driven by a $90.0 million non-cash goodwill impairment recorded in 2024. Excluding this non-cash loss, operating income and

margin for the Other segment increased primarily due to our operating leverage and disciplined expense management.

Liquidity and capital resources

Our principal liquidity requirements are to service and repay our indebtedness, make acquisitions of businesses and commercial

account portfolios, repurchase shares of our common stock and meet working capital, tax and capital expenditure needs.

Sources of liquidity.  We believe that our current level of cash and borrowing capacity under our Credit Facility, Securitization

Facility and other facilities (each discussed below), together with expected future cash flows from operations, will be sufficient

to meet the needs of our existing operations and planned requirements for at least the next 12 months and into the foreseeable

future, based on our current assumptions. At December 31, 2024, we had approximately $2.1 billion in total liquidity,

consisting of approximately $0.5 billion available under our Credit Facility (defined below) and unrestricted cash of $1.6

billion, a portion of which includes customer deposits or is required for working capital and regulatory purposes. Restricted

cash primarily represents customer deposits repayable on demand held in certain geographies with legal restrictions, customer

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funds held for the benefit of others, collateral received from customers for cross-currency transactions in our cross-border

payments business, which is restricted from use other than to repay customer deposits and to secure and settle cross-currency

transactions, and collateral posted with banks for hedging positions in our cross-border payments business.

We also utilize the Securitization Facility to finance a portion of our domestic receivables, to lower our cost of borrowing and

more efficiently use capital. Accounts receivable collateralized within our Securitization Facility relate to trade receivables

resulting primarily from charge card activity in Vehicle Payments and Corporate Payments and receivables related to our

Lodging Payments business in the U.S. We also consider the available and undrawn amounts under our Securitization Facility

and Credit Facility as funds available for working capital purposes and acquisitions. At December 31, 2024, we had no

additional liquidity under our Securitization Facility.

We have determined that outside basis differences associated with our investments in foreign subsidiaries would not result in a

material deferred tax liability, and, consistent with our assertion that these amounts continue to be indefinitely invested, have

not recorded incremental income taxes for the additional outside basis differences.

Cash flows

The following table summarizes our cash flows for the years ended December 31, 2024 and 2023.

Operating activities. Net cash provided by operating activities was $1,940.6 million in 2024, a decrease from $2,101.1 million

in 2023. The decrease in operating cash flows was primarily driven by changes in working capital.

Investing activities. Net cash used in investing activities was $807.5 million in 2024, an increase from $380.7 million in 2023.

The increase in cash used for investing activities was primarily due to incremental spending on acquisitions completed in 2024

over the comparable period in 2023. Additionally, our capital expenditures were $175.2 million in 2024, an increase of $21.4

million, or 14%, from $153.8 million in 2023 due to the impact of acquisitions and continued investments in technology.

Financing activities. Net cash provided by financing activities was $405.0 million in 2024 compared to net cash used in

financing activities of $898.2 million in 2023. Net cash provided by financing activities in 2024 was primarily due to (i) net

borrowings on our Credit Facility and Securitization Facility of $1,271.2 million during 2024 as compared to net repayments of

$322.4 million during 2023 and (ii) an increase in proceeds of $314.5 million from common stock resulting from stock option

exercises, partially offset by increased outflows for repurchases of common stock of $601.1 million in 2024 versus 2023.

Credit Facility

Corpay Technologies Operating Company, LLC, and certain of our domestic and foreign owned subsidiaries, as designated co-

borrowers (the “Borrowers”), are parties to a $7.5 billion Credit Agreement (the “Credit Agreement”), with Bank of America,

N.A., as administrative agent, swing line lender and letter of credit issuer and a syndicate of financial institutions (the

“Lenders”), which has been amended multiple times. The Credit Agreement provides for senior secured credit facilities

(collectively, the "Credit Facility") consisting of a revolving credit facility in the amount of $1.8 billion, a Term Loan A facility

in the amount of $3.3 billion ("Term Loan A") and a Term Loan B facility in the amount of $2.4 billion ("Term Loan B") as of

December 31, 2024. The revolving credit facility consists of (a) a revolving A credit facility in the amount of $1.3 billion with

sublimits for letters of credit and swing line loans and (b) a revolving B facility in the amount of $500 million with borrowings

in U.S. dollars, euros, British pounds, Japanese yen or other currency as agreed in advance and a sublimit for swing line loans.

The Credit Agreement also includes an accordion feature for borrowing an additional $750 million in Term Loan A, Term Loan

B, revolving A or revolving B facility debt and an unlimited amount when the leverage ratio on a pro-forma basis is less than

3.75 to 1.00. Proceeds from the credit facilities may be used for working capital purposes, acquisitions and other general

corporate purposes. The maturity date for the Term Loan A and revolving credit facilities A and B is June 24, 2027. The Term

Loan B has a maturity date of April 30, 2028.

On May 3, 2023, the Company entered into the thirteenth amendment to the Credit Facility. The amendment replaced LIBOR

on the Term Loan B with the Secured Overnight Financing Rate (SOFR), plus a SOFR adjustment of 0.10%.

On January 31, 2024, we entered into the fourteenth amendment to the Credit Agreement. The amendment a) increased the

capacity on the revolving credit facility by $275.0 million and b) increased the Term Loan A commitments by $325.0 million.

We used the Term Loan A proceeds to pay down existing borrowings under the revolving credit facility. As a result, the

transaction was leverage neutral and results in a $600 million increase in our availability under the revolving credit facility. The

interest rates and maturity terms remain consistent with the existing credit facilities.

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On September 26, 2024, we entered into the fifteenth amendment to the Credit Agreement. The amendment a) increased the

Term Loan B commitments by $500 million and b) removed the SOFR adjustment margin of 0.10% from the calculation of

interest on Term Loan B borrowings. We used the Term Loan B proceeds to pay down existing borrowings under the revolving

credit facility. The maturity dates and the interest rates for the revolving credit facility and Term Loan A commitments were

unchanged by this amendment.

On February 20, 2025, we entered into the sixteenth amendment to the Credit Agreement. The amendment increased the Term

Loan B commitments by an incremental $750 million. We used the Term Loan B proceeds to pay down existing borrowings

under the revolving credit facility and other general corporate purposes. The maturity dates and the interest rates for the Credit

Agreement were unchanged by this amendment.

Interest on amounts outstanding under the Credit Agreement accrues as follows: for all loans denominated in U.S. dollars with

the exception of Term Loan B borrowings, based on SOFR plus a SOFR adjustment of 0.10%; for Term Loan B borrowings,

based on SOFR; for all loans denominated in British pounds, based on the SONIA plus a SONIA adjustment of 0.0326%; for

all loans denominated in euros, based on the Euro Interbank Offered Rate (EURIBOR); or for all loans denominated in

Japanese yen, at the Toyko Interbank Offer Rate (TIBOR) plus a margin based on a leverage ratio (as defined in the

agreement); or our option (for U.S. dollar borrowings only), the Base Rate (defined as the rate equal to the highest of (a) the

Federal Funds Rate plus 0.50%, (b) the prime rate announced by Bank of America, N.A., or (c) SOFR plus 1.00% plus a margin

based on a leverage ratio). In addition, we pay a quarterly commitment fee at a rate per annum ranging from 0.25% to 0.30% of

the daily unused portion of the credit facility.

At December 31, 2024, the interest rate on the Term Loan A was 5.83%, the interest rate on the Term Loan B was 6.11%, the

interest rate on the revolving A and B facilities (USD borrowings) was 5.83%, and the interest rate on the revolving B facility

(GBP borrowings) was 6.11%. The unused credit facility fee was 0.25% for all revolving facilities at December 31, 2024.

The term loans are payable in quarterly installments due on the last business day of each March, June, September and

December with the final principal payment due on the respective maturity date. Borrowings on the revolving line of credit are

repayable at the maturity of the facility. Borrowings on the domestic swing line of credit are due on demand, and borrowings on

the foreign swing lines of credit are due no later than twenty business days after such loan is made.

The obligations of the Borrowers under the Credit Agreement are secured by substantially all of the assets of Corpay and its

domestic subsidiaries, pursuant to a security agreement and includes a pledge of (i) 100% of the issued and outstanding equity

interests owned by us of each Domestic Subsidiary and (2) 66% of the voting shares of the first-tier foreign subsidiaries, but

excluding real property, personal property located outside of the U.S., accounts receivables and related assets subject to the

Securitization Facility and certain investments required under money transmitter laws to be held free and clear of liens.

At December 31, 2024, we had $3.1 billion in borrowings outstanding on Term Loan A, net of discounts, $2.3 billion in

borrowings outstanding on Term Loan B, net of discounts and $1.3 billion in borrowings outstanding on the revolving credit

facility. We have unamortized debt issuance costs of $3.4 million related to the revolving credit facility as of December 31,

2024 recorded in other assets within the Consolidated Balance Sheets. We have unamortized debt discounts and debt issuance

costs of $16.6 million related to the term loans as of December 31, 2024 recorded in notes payable and other obligations, net of

current portion within the Consolidated Balance Sheets. As a result of the amortization of debt discounts and debt issuance

costs, the effective interest rate incurred on the term loans was 6.87% during 2024.

During the year ended December 31, 2024, we made borrowings of $825.0 million on the term loans, principal payments of

$140.1 million on the term loans and net borrowings of $570.3 million on the revolving facilities.

As of December 31, 2024, we were in compliance with each of the covenants under the Credit Agreement.

Securitization Facility

We are a party to a $1.7 billion receivables purchase agreement among Corpay Funding LLC, as seller, PNC Bank, National

Association as administrator, and various purchaser agents, conduit purchasers and related committed purchasers parties thereto

(the "Securitization Facility") as of December 31, 2024. At December 31, 2024, the interest rate on the Securitization Facility

was 5.36%.

On January 24, 2025, we entered into an omnibus amendment to our Securitization Facility. The amendment increased the

Securitization Facility commitment from $1.7 billion to $1.8 billion and extended the maturity of the Securitization Facility

from August 18, 2025 to January 24, 2028. The omnibus amendment also reduced the program fee by 5 bps to SOFR plus

0.10% adjustment plus 0.90% or the Commercial Paper Rate plus 0.80% and decreased the unused facility fee by 5 bps for two

of the purchasers.

The Securitization Facility provides for certain termination events, which includes nonpayment, upon the occurrence of which

the administrator may declare the facility termination date to have occurred, may exercise certain enforcement rights with

respect to the receivables and may appoint a successor servicer, among other things.

We were in compliance with all financial and non-financial covenant requirements related to our Securitization Facility as of

December 31, 2024.

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Other Facilities

We carefully monitor and manage initial and variation margin requirements for our cross-border solutions, which can result in

transitory periods of elevated liquidity needs in cases where the currency market experiences disruption. In order to help

mitigate that liquidity risk, we have entered into facilities intended to provide additional means to manage working capital

needs for our cross-border solutions.

We have three unsecured overdraft facilities with a combined capacity of $155.0 million, which may be accessible via written

request and corresponding authorization from the applicable lenders. There is no guarantee the uncommitted capacity will be

available to us on a future date. Interest on drawn balances accrues under the agreements at either (a) a fixed rate equal to the

lender's reference rate or the Federal Funds Effective Rate (as defined in the respective agreements) plus 1% or (b) SOFR plus

1.25%. As of December 31, 2024, we had no borrowings outstanding under the uncommitted credit facilities.

We also have a 364-day committed revolving credit facility with a total commitment of $70.0 million and maturity date of

February 20, 2026. Borrowings under this facility will bear interest at the borrower's option at a rate equal to (a) Term SOFR

(as defined in the agreement) plus 1.25% or (b) the Base Rate (determined by reference to the greatest of (i) the Federal Funds

Effective Rate, at that time, plus 0.50%, (ii) the Prime Rate, at that time, and (iii) Term SOFR (as defined in the agreement) at

such time plus 1.00%). As of December 31, 2024, we had no borrowings outstanding under the committed credit facility.

Cash Flow Hedges

As of December 31, 2024, we had the following outstanding interest rate swap derivatives that qualify as hedging instruments

within designated cash flow hedges of variable interest rate risk (in millions):

The purpose of these contracts is to reduce the variability of cash flows in interest payments associated with $4.5 billion of

unspecified variable rate debt, the sole source of which is due to changes in the SOFR benchmark interest rate. For each of

these swap contracts, we pay a fixed monthly rate and receive one month SOFR.

Our cash flow hedges resulted in a reduction to interest expense, net of $46.3 million and $39.4 million during the years ended

December 31, 2024 and 2023, respectively.

Net Investment Hedges

We enter into cross-currency interest rate swaps that are designated as net investment hedges of our investments in foreign-

denominated operations. Such contracts effectively convert the U.S. dollar equivalent notional amounts to obligations

denominated in the respective foreign currency and partially offset the impact of changes in currency rates on such foreign-

denominated net investments. These contracts also create a positive interest differential on the U.S. dollar-denominated portion

of the swaps, resulting in interest rate savings on the USD notional.

At December 31, 2024, we had the following cross-currency interest rate swaps designated as net investment hedges of our

investments in foreign-denominated operations:

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Hedge effectiveness is tested based on changes in the fair value of the cross-currency swaps due to changes in the USD/foreign

currency spot rates. We anticipate perfect effectiveness of the designated hedging relationships and record changes in the fair

value of the cross-currency interest rate swaps associated with changes in the spot rate through accumulated other

comprehensive loss. Excluded components associated with the forward differential are recognized directly in earnings as

interest expense, net. We recognized a benefit of $13.9 million and $9.0 million in interest expense, net for the years ended

December 31, 2024 and 2023, respectively, related to these excluded components.

In January 2025, we terminated our existing CAD cross-currency interest rate swaps designated as net investment hedges and

subsequently entered into four new cross-currency interest rate swaps designated as net investment hedges of our investments in

CAD-denominated operations. These contracts effectively convert an aggregate $800 million of U.S. dollar equivalent to an

obligation denominated in CAD and partially offset the impact of changes in currency rates on our CAD-denominated net

investments. These contracts also create a positive interest differential on the U.S. dollar-denominated portion of the swap,

resulting in a weighted average interest rate savings of 1.35% on the USD notional.

Acquisition

In February 2025, we signed a definitive agreement to acquire 100% of Gringo, a leading Brazil-based vehicle registration and

compliance payment company, for approximately $147.0 million, net of cash of approximately $22 million. Gringo's digital app

and national network help drivers in Brazil pay for vehicle taxes, registration and fines. The transaction is expected to close in

the first quarter of 2025, subject to regulatory approval and standard closing conditions and will be reflected in our Vehicle

Payments segment.

Stock Repurchase Program

Given our returns on our capital investments and significant cash provided by operations, management believes it is prudent to

reinvest in the business to drive profitable growth and use excess cash flow to return cash to shareholders over time through

stock repurchases. Our Board of Directors (the "Board") has approved a stock repurchase program (as updated from time to

time, the "Program") authorizing us to repurchase our common stock from time to time until February 4, 2026. On January 25,

2024, the Board authorized an increase to the aggregate size of the Program by $1.0 billion to $8.1 billion, and on November 4,

2024, the Board authorized an increase to the aggregate size of the Program by $1.0 billion to $9.1 billion. Since the beginning

of the Program through December 31, 2024, we have repurchased 33,090,680 shares for an aggregate purchase price of $7.8

billion, leaving us up to $1.3 billion of remaining authorization available under the Program for future repurchases in shares of

our common stock. We repurchased 4,211,818 common shares totaling $1.3 billion in 2024; 2,597,954 common shares totaling

$0.7 billion in 2023 and 6,212,410 common shares totaling $1.4 billion in 2022.

Any stock repurchases may be made at times and in such amounts as deemed appropriate. The timing and amount of stock

repurchases, if any, will depend on a variety of factors including the stock price, market conditions, corporate and regulatory

requirements, and any additional constraints related to material inside information we may possess. Any repurchases have been

and are expected to be funded by a combination of available cash flow from the business, working capital and debt.

Material Cash Requirements and Uses of Cash

Material cash requirements primarily consist of debt obligations and related interest payments, along with lease obligations.

See Note 11 and Note 14 to the Consolidated Financial Statements within this Form 10-K for further information.

Deferred income tax liabilities as of December 31, 2024 were approximately $439.2 million. See Note 13 to the Consolidated

Financial Statements within this Form 10-K for further information. Deferred income tax liabilities are calculated based on

temporary differences between the tax bases of assets and liabilities and their respective book bases, which will result in taxable

amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these

calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods. As a result,

scheduling deferred income tax liabilities as payments due by period could be misleading, as this scheduling would not relate to

liquidity needs. At December 31, 2024, we had approximately $95.5 million of unrecognized income tax benefits related to

uncertain tax positions. We cannot reasonably estimate when all of these unrecognized income tax benefits may be settled. We

do not expect reductions to unrecognized income tax benefits within the next 12 months as a result of projected resolutions of

income tax uncertainties.

Critical Accounting Estimates

In applying the accounting policies that we use to prepare our consolidated financial statements, we necessarily make

accounting estimates that affect our reported amounts of assets, liabilities, revenue and expenses. Some of these estimates

require us to make assumptions about matters that are highly uncertain at the time we make the accounting estimates. We base

these assumptions and the resulting estimates on historical information and other factors that we believe to be reasonable under

the circumstances, and we evaluate these assumptions and estimates on an ongoing basis. In many instances, however, we

reasonably could have used different accounting estimates and, in other instances, changes in our accounting estimates could

occur from period to period, with the result in each case being a material change in the financial statement presentation of our

financial condition or results of operations. We refer to estimates of this type as critical accounting estimates. The critical

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accounting estimates that we discuss below are those that we believe are most important to an understanding of our

consolidated financial statements.

For a discussion of our Summary of Significant Accounting Policies, see Note 2 to our Consolidated Financial Statements

within this Form 10-K for further information.

Financial Instruments-Credit Losses. Our current expected credit loss methodology for measurement of credit losses on

financial assets measured at amortized cost basis, replaces the previous incurred loss impairment methodology. Our financial

assets subject to credit losses are primarily trade receivables. We utilize a combination of aging and loss-rate methods to

develop an estimate of current expected credit losses, depending on the nature and risk profile of the underlying asset pool,

based on product, size of customer and historical losses. Expected credit losses are estimated based upon an assessment of risk

characteristics, historical payment experience and the age of outstanding receivables, adjusted for forward-looking economic

conditions. The allowances for remaining financial assets measured at amortized cost basis are evaluated based on underlying

financial condition, credit history and current and forward-looking economic conditions. The estimation process for expected

credit losses includes consideration of qualitative and quantitative risk factors associated with the age of asset balances,

expected timing of payment, contract terms and conditions, changes in specific customer risk profiles or mix of customers,

geographic risk, economic trends and relevant environmental factors. See Note 2 to our Consolidated Financial Statements

within this Form 10-K for further information.

Impairment of goodwill and indefinite-lived assets. We complete an impairment test of goodwill at least annually or more

frequently if facts or circumstances indicate that goodwill might be impaired. Goodwill is tested for impairment at the reporting

unit level. When we believe it is appropriate, we may elect to first perform the optional qualitative assessment for certain of our

reporting units. Factors considered in the qualitative assessment include general macroeconomic conditions, industry and

market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the

composition or carrying amount of the net assets of our reporting units, sustained decrease in our share price and other relevant

entity-specific events. If we elect to bypass the optional qualitative assessment or if we determine, on the basis of qualitative

factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative test would be

required. We then perform the quantitative goodwill impairment test for the applicable reporting units by comparing the

reporting unit’s carrying amount, including goodwill, to its fair value, which is measured based upon, among other factors, a

discounted cash flow analysis and, to a lesser extent, market multiples for comparable companies. If the carrying amount of the

reporting unit is greater than its fair value, a goodwill impairment loss is recognized.

We also evaluate indefinite-lived intangible assets (primarily trademarks and trade names) for impairment annually. We test for

impairment at an interim date if events and circumstances indicate that it is more likely than not that the fair value of an

indefinite-lived intangible asset is below its carrying amount. An impairment loss is recorded if the carrying amount of an

indefinite-lived intangible asset exceeds the estimated fair value on the measurement date.

Globally we face uncertainties and risks related to economic factors in the countries we have operations. As a result, we make

assumptions that involve significant judgment about future uncertainties when performing impairment tests of goodwill and

indefinite-lived intangible assets. Both of these impairment tests involve the use of critical accounting estimates. Depending on

the test/model, factors and estimates used to estimate the fair value include: i) earnings before interest, taxes, depreciation and

amortization (EBITDA) margin and growth, and ii) the discount rates for the goodwill impairment test; and i) the discount rates

and ii) royalty rates used for indefinite-lived intangible assets test. The variability of these estimates and assumptions depends

on a number of conditions which could change our conclusion at each reporting period. As these factors are often

interdependent and may not change in isolation, we do not believe it is meaningful to estimate and disclose the impact of

changing a single factor. If our assumptions and estimates change between a current period impairment test and a prior period

impairment test, impairment losses could result. If we were to use different assumptions or consider different trends in future

periods, impairment losses may also result. The total future impairment losses, if required, may be material.

As of October 1, 2024, as a result of our annual evaluation, we determined the goodwill within the Payroll card reporting unit, a

component of our “Other” category, was partially impaired. Accordingly, we recognized a goodwill impairment loss of $90

million within goodwill impairment in the Consolidated Statements of Income during the year ended December 31, 2024.

Factors that led to this conclusion included i) decreased use of the card and its core component for our target customers, ii) the

impact of historic and sustained increases in inflation and interest rates on the reporting unit’s weighted average costs of capital

which was beyond our control, and iii) inability to achieve forecasted operating results at historical underwritten values, all of

which resulted in revised mid to long-term projections during the fourth quarter of 2024, including reevaluation of the

Company's anticipated capital investment in the reporting unit and which negatively impacted the reporting unit's fair value. We

engaged the assistance of a third-party valuation firm to assist us with the performance of our goodwill quantitative impairment

test. The estimation of the net present value of future cash flows is based upon varying economic assumptions, including

assumptions such as revenue, net growth rates, operating costs, EBITDA margins, capital expenditures, tax rates, long-term

growth rates and discount rates. As it relates to the Payroll card reporting unit, of these assumptions, EBITDA margins and

discount rates are the most sensitive, subjective and/or complex. These assumptions are based on risk-adjusted discount factors

accommodating viewpoints that consider the full range of variability contemplated in the current and potential future economic

situations. There is approximately $57 million of goodwill remaining related to the Payroll card reporting unit following this

impairment. The results of our 2024 impairment test for our reporting units other than Payroll card indicated that the estimated

fair value of each of our reporting units was in excess of the corresponding carrying amount as of October 1, and no impairment

of goodwill existed.

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In September 2023, we acquired PayByPhone Technologies, Inc., a global parking payment application, for approximately

$301.9 million, net of cash. Results from PayByPhone are reported in our Vehicle Payments segment. We allocated

approximately $11 million to the PayByPhone trade name with a residual value of approximately $207 million allocated to

goodwill for the PayByPhone reporting unit. If the near-term operating results do not meet or exceed our current financial

projections, or if conditions change causing, for example, the discount rate to increase without an offsetting increase in the

results of the PayByPhone business, it is possible that we would be required to recognize an impairment loss as the fair value of

the reporting unit currently exceeds the carrying value by less than 20%, due to the standalone nature of the business and recent

timing of the acquisition. We will continue to monitor the operating results and the fair value of this reporting in future periods.

See Note 2 and Note 8 to our Consolidated Financial Statements within this Form 10-K for further information.

Income taxes. Our annual effective tax rate is based on our income and the tax laws in the various jurisdictions in which we

operate. Significant judgment is required in estimating our annual income tax expense and annual effective rate through the

realizability of our deferred tax assets, our income tax positions and related reserves and the recording of certain deferred tax

liabilities related to foreign investments.

The ultimate realization of a deferred tax asset is dependent upon the existence and timing of reversal of temporary differences,

the ability to carryback income to open years and where allowed, the implementation of tax planning strategies and the

generation of future taxable income during the periods in which the associated temporary differences become deductible.

Determining future taxable income requires us to estimate the amount of income subject to tax in future periods which includes:

i) estimating revenue, revenue growth rates, Earnings and Interest Before Income Taxes and expenses by tax jurisdiction by

examining historical results and considering current/future trends as well as scheduling out the timing of temporary items, ii)

factoring in adjustments for any known future changes in tax law/regulations, iii) the potential impact of any reasonable tax

planning strategies, and iv) estimating the future impact of complex material deductions. We record a valuation allowance

where we determine that it is not more likely than not that we will ultimately realize the entire tax benefit associated with the

related deferred tax asset.

We estimate income tax-related reserves to reduce tax benefits from any income tax positions where we believe the benefit

from the tax position once taken on the tax return is uncertain such that it is more likely than not to be upheld by the tax

regulatory body but for an amount less than the benefit taken. When determining whether the full amount of the income tax

position will be upheld/sustained, we consider whether the technical merits of the position are supported by regulations, court

ruling, current legislation and other relevant authoritative guidance.

We include any estimated interest and penalties on tax related matters in income tax expense. See Note 13 to our Consolidated

Financial Statements within this Form 10-K for further information.

Business combinations (valuation of intangible assets). Acquired assets and liabilities assumed, including contingencies,

through a business combination are recorded at fair value determined as of the acquisition date. The estimates we use to

determine the fair value of intangible assets can be complex and require significant judgments. We use information available to

us to make fair value determinations and engage independent valuation specialists, when necessary, to assist in the fair value

determination of significant acquired assets. The estimated fair values of customer-related and contract-based intangible assets

are generally determined using the income approach, which is based on projected cash flows discounted to their present value

using discount rates that consider the timing and risk of the forecasted cash flows. The discount rates used represented a risk

adjusted market participant weighted-average cost of capital, derived using customary market metrics. These measures of fair

value also require considerable judgments about future events, including forecasted customer attrition rates. Acquired

technologies are generally valued using the replacement cost method, which requires us to estimate the costs to construct an

asset of equivalent utility at prices available at the time of the valuation analysis, with adjustments in value for physical

deterioration and functional and economic obsolescence.

While we use our best estimates and assumptions to determine the fair values of the assets acquired and the liabilities assumed,

our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up

to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed. Upon the conclusion

of the measurement period, any subsequent adjustments are recorded in our Consolidated Statements of Income. We also

estimate the useful lives of intangible assets to determine the period over which to recognize the amount of acquisition-related

intangible assets as an expense. Certain assets may be considered to have indefinite useful lives. We periodically review the

estimated useful lives assigned to our intangible assets to determine whether such estimated useful lives continue to be

appropriate. Refer to Note 8 to our Consolidated Financial Statements within this Form 10-K for further information.

Management’s Use of Non-GAAP Financial Measures

We have included in the discussion below certain financial measures that were not prepared in accordance with GAAP. Any

analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.

Below, we define the non-GAAP financial measures, provide a reconciliation of each non-GAAP financial measure to the most

directly comparable financial measure calculated in accordance with GAAP and discuss the reasons that we believe this

information is useful to management and may be useful to investors. Because our non-GAAP financial measures are not

standardized measures, they may not be directly comparable with the non-GAAP financial measures of other companies using

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the same or similar non-GAAP financial measures. Although management uses these non-GAAP measures to set goals and

measure performance, they have no standardized meaning prescribed by GAAP. These non-GAAP measures are presented

solely to permit investors to more fully understand how our management assesses underlying performance. These non-GAAP

measures are not, and should not be viewed as, a substitute for GAAP measures, and should be viewed in conjunction with our

GAAP financial statements and financial measures. As a result, such non-GAAP measures have limits in their usefulness to

investors.

We have defined the non-GAAP measure adjusted net income attributable to Corpay as net income attributable to Corpay, as

reflected in our statement of income, adjusted to eliminate (a) non-cash stock-based compensation expense related to stock-

based compensation awards, (b) amortization of deferred financing costs, discounts, intangible assets, amortization of the

premium recognized on the purchase of receivables and amortization attributable to the Company's noncontrolling interest, (c)

integration and deal related costs, and (d) other non-recurring items, including unusual credit losses, certain discrete tax items,

the impact of business dispositions, impairment losses, asset write-offs, restructuring costs, loss on extinguishment of debt,

taxes associated with stock-based compensation programs, losses and gains on foreign currency transactions and legal

settlements and related legal fees. We adjust net income for the tax effect of adjustments using our effective income tax rate,

exclusive of certain discrete tax items. We calculate adjusted net income attributable to Corpay and adjusted net income per

diluted share attributable to Corpay to eliminate the effect of items that we do not consider indicative of our core operating

performance. We have defined the non-GAAP measure adjusted net income per diluted share attributable to Corpay as the

calculation previously noted divided by the weighted average diluted shares outstanding as reflected in our statement of income.

Adjusted net income attributable to Corpay and adjusted net income per diluted share attributable to Corpay are supplemental

measures of operating performance that do not represent and should not be considered as an alternative to net income, net

income per diluted share or cash flow from operations, as determined by GAAP. We believe it is useful to exclude non-cash

share based compensation expense from adjusted net income because non-cash equity grants made at a certain price and point

in time do not necessarily reflect how our business is performing at any particular time and share based compensation expense

is not a key measure of our core operating performance. We also believe that amortization expense can vary substantially from

company to company and from period to period depending upon their financing and accounting methods, the fair value and

average expected life of their acquired intangible assets, their capital structures and the method by which their assets were

acquired; therefore, we have excluded amortization expense from our adjusted net income. Integration and deal related costs

represent business acquisition transaction costs, professional services fees, short-term retention bonuses and system migration

costs, etc., that are not indicative of the performance of the underlying business. We also believe that certain expenses, certain

discrete tax items, gains on business dispositions, recoveries (e.g., legal settlements, write-off of customer receivable, etc.),

gains and losses on investments, taxes related to stock-based compensation programs and impairment losses do not necessarily

reflect how our investments and business are performing. We adjust net income for the tax effect of each of these adjustments

using the effective income tax rate during the period, exclusive of certain discrete tax items.

Organic revenue growth is calculated as revenue growth in the current period adjusted for the impact of changes in the

macroeconomic environment (to include fuel price, fuel price spreads and changes in foreign exchange rates) over revenue in

the comparable prior period adjusted to include or remove the impact of acquisitions and/or divestitures and non-recurring

items that have occurred subsequent to that period. We believe that organic revenue growth on a macro-neutral and consistent

acquisition/divestiture/non-recurring item bases is useful to investors for understanding the performance of Corpay.

EBITDA is defined as earnings before interest, income taxes, interest expense, net, other expense (income), depreciation and

amortization, goodwill impairment, loss on extinguishment of debt, investment loss/gain and other operating, net. Adjusted

EBITDA is defined as EBITDA further adjusted for a material modification impacting stock-based compensation expense and a

deal related termination expense. EBITDA and adjusted EBITDA margin are defined as EBITDA and adjusted EBITDA as a

percentage of revenue.

Management uses adjusted net income attributable to Corpay, adjusted net income per diluted share attributable to Corpay,

organic revenue growth, EBITDA and adjusted EBITDA:

•as measurements of operating performance because they assist us in comparing our operating performance on a

consistent basis;

•for planning purposes, including the preparation of our internal annual operating budget;

•to allocate resources to enhance the financial performance of our business; and

•to evaluate the performance and effectiveness of our operational strategies.

Reconciliation of Non-GAAP Revenue and Key Performance Metric by Segment to GAAP. Set forth below is a reconciliation of

organic growth by segment, calculated using pro forma and macro adjusted revenue and transactions to the most directly

comparable GAAP measure, revenue, net and transactions (in millions):

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Reconciliation of Non-GAAP Measures. Set forth below is a reconciliation of adjusted net income attributable to Corpay and

adjusted net income per diluted share attributable to Corpay to the most directly comparable GAAP measure, net income attributable

to Corpay and net income per diluted share attributable to Corpay (in millions, except per share amounts)*:

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EBITDA, Adjusted EBITDA Measures. EBITDA is defined as earnings before interest, income taxes, interest expense, net,

other loss (income), depreciation and amortization, loss on extinguishment of debt, goodwill impairment, investment loss/gain,

gain on disposition of business and other operating, net. Adjusted EBITDA is defined as EBITDA further adjusted for a

material modification impacting stock-based compensation expense and a deal related termination expense. EBITDA and

adjusted EBITDA margin is defined as EBITDA and adjusted EBITDA as a percentage of revenue.

The following table reconciles EBITDA, Adjusted EBITDA and Adjusted EBITDA margin to net income from operations (in

millions, except percentages)*:

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes appearing elsewhere in this report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences include, but are not limited to, those identified below and those described in Item 1A “Risk Factors” appearing elsewhere in this report. All foreign currency amounts that have been converted into U.S. dollars in this discussion are based on the exchange rate as reported by Oanda for the applicable periods.

The following discussion and analysis of our financial condition and results of operations generally discusses 2023 and 2022 items, with year-over-year comparisons between these two years. A detailed discussion of 2022 items and year-over-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.

Executive Overview

FLEETCOR is a global payments company that helps businesses and consumers better manage their expenses. FLEETCOR's suite of modern payment solutions help customers better manage vehicle-related expenses (e.g. fueling, tolls and parking), lodging expenses (e.g. hotel bookings) and corporate payments (e.g. domestic and international vendors). This results in our customers saving time and ultimately spending less. Since its incorporation in 2000, FLEETCOR’s smarter payment and spend management solutions have been delivered in a variety of ways depending on the needs of the customer. From physical payment cards to software that includes customizable controls and robust payment capabilities, we provide businesses and consumers with a better way to pay.

FLEETCOR has been a member of the S&P 500 since 2018 and trades on the New York Stock Exchange under the ticker FLT. We expect to rebrand FLEETCOR to Corpay, Inc. in March 2024, including changing our New York Stock Exchange ticker from FLT to CPAY.

Businesses spend an estimated $135 trillion each year in transactions with other businesses. In many instances, businesses lack the proper tools to monitor what is being purchased, and employ manual, paper-based, disparate processes and methods to both approve and make payments for their business-to-business purchases. This often results in wasted time and money due to unnecessary or unauthorized spending, fraud, receipt collection, data input and consolidation, report generation, reimbursement processing, account reconciliations, employee disciplinary actions, and more.

FLEETCOR’s vision is that every payment is digital, every purchase is controlled, and every related decision is informed. Digital payments are faster and more secure than paper-based methods such as checks, and provide timely and detailed data that can be utilized to effectively reduce unauthorized purchases and fraud, automate data entry and reporting, and eliminate reimbursement processes. Combining this payment data with analytical tools delivers powerful insights, which managers can use to better run their businesses. Our wide range of modern, digitized solutions generally provides control, reporting, and automation benefits superior to many of the payment methods businesses often use such as cash, paper checks, general purpose credit cards, as well as employee pay and reclaim processes.

Impact of Geo-Political Events on Our Business

The current military conflicts between Russia and Ukraine, as well as within the Middle East, continue to create substantial uncertainty about the global economy in the future. Although the length, impact and outcome of the ongoing military conflicts between Russia and Ukraine and within the Middle East are highly unpredictable, these conflicts could lead to significant market and other disruptions. We recently exited the Russia market via the disposition of our Russia business, which closed in the third quarter of 2023 (see "Russia Disposition" section below), and we do not have material operations in Israel or Gaza. We cannot predict how and the extent to which these conflicts will affect our customers, operations or business partners or the demand for our products and our global business.

We are actively monitoring the situations and assessing the impact on our business. The extent, severity, duration and outcome of the military conflicts, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time.

Russia Disposition

During the second quarter of 2023, we signed definitive documents to sell our Russia business to a third party. At June 30, 2023, we concluded that the sale was not considered probable due to continued uncertainty regarding regulatory approvals and ongoing discussions regarding the nature and timing of deal completion. As such, the assets and liabilities associated with our Russian business were not classified as held for sale prior to the completion of the transaction. The Russia business was historically reported within our Vehicle Payments segment and did not meet the criteria to be presented as discontinued operations. We completed the sale of our Russia business on August 15, 2023.

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The sale included the entirety of our operations in Russia and resulted in a complete exit from the Russia market. We received total proceeds, net of cash disposed and net of a $5.6 million foreign exchange loss upon conversion of the ruble-denominated proceeds to U.S. dollars, of $197.0 million, which have been recorded within investing activities in the accompanying Consolidated Statements of Cash Flows. In connection with the sale, we recorded a net gain on disposal of $13.7 million during the year ended December 31, 2023, which represents the proceeds received less the derecognition of the related net assets, the reclassification of accumulated foreign currency translation losses, and the foreign exchange loss upon conversion of the ruble-denominated proceeds to U.S. dollars. The net gain is included within other (income) expense, net in the accompanying Consolidated Statements of Income.

Exclusive of the impact of disposition, our business in Russia accounted for approximately $62.0 million and $84.7 million of our consolidated income before income taxes for years ended December 31, 2023 and 2022, respectively. Our assets in Russia were approximately 3.2% of our consolidated assets at December 31, 2022.

Results

Revenues, net, Net Income and Net Income Per Diluted Share. Set forth below are revenues, net, net income and net income per diluted share for the years ended December 31, 2023 and 2022 (in millions, except per share amounts).

Adjusted Net Income, Adjusted Net Income Per Diluted Share, EBITDA and EBITDA margin. Set forth below are adjusted net income, adjusted net income per diluted share, EBITDA and EBITDA margin for the years ended December 31, 2023 and 2022 (in millions, except per share amounts).

Adjusted net income, adjusted net income per diluted share, EBITDA and EBITDA margin are supplemental non-GAAP financial measures of operating performance. See the heading entitled “Management’s Use of Non-GAAP Financial Measures” for more information and a reconciliation of the non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with U.S. generally accepted accounting principles, or GAAP. We use adjusted net income, adjusted net income per diluted share, EBITDA and EBITDA margin to eliminate the effect of items that we do not consider indicative of our core operating performance on a consistent basis. These non-GAAP measures are presented solely to permit investors to more fully understand how our management assesses underlying performance and are not, and should not be viewed as, a substitute for GAAP measures, and should be viewed in conjunction with our GAAP financial measures.

Sources of Revenue

FLEETCOR offers a variety of payment solutions that help to simplify, automate, secure, digitize and effectively control the way businesses and consumers manage and pay their expenses. We provide our payment solutions to our business, merchant, consumer and payment network customers in more than 150 countries around the world today, although we operate primarily in three geographies, with approximately 83% of our business in the U.S., Brazil, and the U.K. Our customers may include commercial businesses (obtained through direct and indirect channels) and partners for whom we manage payment programs, as well as individual consumers.

We report information about our operating segments in accordance with the authoritative guidance related to segments. In the fourth quarter of 2023, in order to align with recent changes in our strategy and resulting organizational structure and management reporting, we updated our segment structure. The presentation of segment information has been recast for the prior years to align with this segment presentation for 2023. We manage and report our operating results through the following three reportable segments: Vehicle Payments, Corporate Payments and Lodging Payments. The remaining results are included within Other, which includes our Gift and Payroll Card businesses. These segments align with how the Chief Operating Decision Maker (CODM) allocates resources, assesses performance and reviews financial information.

Our revenue is generally reported net of the cost for underlying products and services purchased. In this report, we refer to this net revenue as “revenue" or "revenues, net". See “Results of Operations” for additional segment information.

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Revenues, net, by Segment. Revenues, net by segment for the years ended December 31, 2023 and 2022, our segments generated the following revenues, net (in millions):

*Columns may not calculate due to rounding. Other includes our Gift and Payroll card operating segments.

We generate revenue in our Vehicle Payments segment through a variety of program fees, including transaction fees, card fees, network fees and charges, as well as from interchange. These fees may be charged as fixed amounts, costs plus a mark-up, based on a percentage of the transaction purchase amounts, or a combination thereof. Our programs also include other fees and charges associated with late payments and based on customer credit risk.

In our Corporate Payments segment, our payables business primarily earns revenue from the difference between the amount charged to the customer and the amount paid to the third party for a given transaction, as interchange or spread revenue. Our programs may also charge fixed fees for access to the network and ancillary services provided. In our cross-border payments business, the majority of revenue is from exchanges of currency at spot rates, which enables customers to make cross-currency payments. Our cross-border payments business also derives revenue from our risk management business, which aggregates foreign currency exposures arising from customer contracts and economically hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. Our performance obligation in our foreign exchange payment services is providing a foreign currency payment to a customer’s designated recipient and therefore, we recognize revenue on foreign exchange payment services when the underlying payment is made. Revenues from foreign exchange payment services are primarily comprised of the difference between the exchange rate we set for the customer and the rate available in the wholesale foreign exchange market.

In our Lodging Payments segment, we primarily earn revenue from the difference between the amount charged to the customer and the amount paid to the hotel for a given transaction or based on commissions paid by hotels. We may also charge fees for access to the network and ancillary services provided.

The remaining revenues represent our Gift and Payroll card businesses, referred to as Other. In these businesses, we primarily earn revenue from the processing of transactions. We may also charge fees for ancillary services provided.

Revenues, net, by Geography Revenues, net by geography for the years ended December 31, 2023 and 2022, were as follows (in millions):

*Columns may not calculate due to rounding.

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Revenues, net, by Key Performance Metric and Organic Growth. Revenues, net by key performance metric and organic growth by segment for the years ended December 31, 2023 and 2022, were as follows (in millions except revenues, net per key performance indicator)*:

Revenue per relevant key performance indicator (KPI), which may include transactions, spend volume, room nights, or other metrics, is derived from the various revenue types as discussed above and can vary based on geography, the relevant merchant relationship, the payment product utilized and the types of products or services purchased, the mix of which would be influenced by our acquisitions, organic growth in our business, and the overall macroeconomic environment, including fluctuations in foreign currency exchange rates, fuel prices and fuel price spreads. Relevant KPI is derived by broad product type and may differ from how we describe the business. Revenue per KPI per customer may change as the level of services we provide to a customer increases or decreases, as macroeconomic factors change and as adjustments are made to merchant and customer rates. See “Results of Operations” for further discussion of transaction volumes and revenue per transaction.

Organic revenue growth is a supplemental non-GAAP financial measure of operating performance. Organic revenue growth is calculated as revenue growth in the current period adjusted for the impact of changes in the macroeconomic environment (to include fuel price, fuel price spreads and changes in foreign exchange rates) over revenue in the comparable prior period adjusted to include or remove the impact of acquisitions and/or divestitures and non-recurring items that have occurred subsequent to that period. See the heading entitled “Management’s Use of Non-GAAP Financial Measures” for more information and a reconciliation of the non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP. We believe that organic revenue growth on a macro-neutral, one-time item, and

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consistent acquisition/divestiture/non-recurring item basis is useful to investors for understanding the performance of FLEETCOR.

Sources of Expenses

We incur expenses in the following categories:

•Processing—Our processing expenses consist of expenses related to processing transactions, servicing our customers and merchants, credit losses and cost of goods sold related to our hardware and card sales in certain businesses.

•Selling—Our selling expenses consist primarily of wages, benefits, sales commissions (other than merchant commissions) and related expenses for our sales, marketing and account management personnel and activities.

•General and administrative—Our general and administrative expenses include compensation and related expenses (including stock-based compensation and bonuses) for our employees, finance and accounting, information technology, human resources, legal and other administrative personnel. Also included are facilities expenses, third-party professional services fees, travel and entertainment expenses, and other corporate-level expenses.

•Depreciation and amortization—Our depreciation expenses include depreciation of property and equipment, consisting of computer hardware and software (including proprietary software development amortization expense), card-reading equipment, furniture, fixtures, vehicles and buildings and leasehold improvements related to office space. Our amortization expenses include amortization of intangible assets related to customer and vendor relationships, trade names and trademarks, software and non-compete agreements. We are amortizing intangible assets related to business acquisitions and certain private label contracts associated with the purchase of accounts receivable.

•Other operating, net—Our other operating, net includes other operating expenses and income items that do not relate to our core operations or that occur infrequently.

•Other (income) expense, net—Our other (income) expense, net includes gains or losses from the following: sales of assets or businesses, foreign currency transactions, extinguishment of debt, and investments. This category also includes other miscellaneous non-operating costs and revenue. Certain of these items may be presented separately on the Consolidated Statements of Income.

•Interest expense, net—Our interest expense, net includes interest expense on our outstanding debt, interest income on cash balances and interest on our interest rate and cross-currency swaps.

•Provision for income taxes—Our provision for income taxes consists of corporate income taxes related primarily to profits resulting from the sale of our products and services on a global basis.

Factors and Trends Impacting our Business

We believe that the following factors and trends are important in understanding our financial performance:

•Global economic conditions—Our results of operations are materially affected by conditions in the economy generally, in North America, Brazil, and internationally, including the current conflict between Russia and Ukraine and other geopolitical events in the Middle East, as discussed elsewhere in this Annual Report on Form 10-K, and the ultimate impact of the COVID-19 pandemic. Factors affected by the economy include our transaction volumes, the credit risk of our customers and changes in tax laws across the globe. These factors affected our businesses in each of our segments.

•Foreign currency changes—Our results of operations are significantly impacted by changes in foreign currency exchange rates; namely, by movements of the Australian dollar, Brazilian real, British pound, Canadian dollar, Czech koruna, euro, Mexican peso, New Zealand dollar and Russian ruble (for periods prior to the disposition or our Russia business), relative to the U.S. dollar. Approximately 57%, and 61% of our revenue in 2023 and 2022, respectively, was derived in U.S. dollars and was not affected by foreign currency exchange rates. See “Results of Operations” for information related to foreign currency impact on our total revenue, net.

Our cross-border foreign risk management business aggregates foreign currency exposures arising from customer contracts and economically hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. These contracts are subject to counterparty credit risk.

In February 2023, to further manage the impact of economic changes in the value of certain foreign-denominated net assets, we entered into a cross currency interest rate swap on $500 million of notional value of investments in various euro-functional subsidiaries. This swap was terminated in February 2024, and we subsequently entered into four new cross-currency interest rate swaps totaling $500 million of notional value that are designated as net investment hedges of our investments in euro-denominated operations.

•Fuel prices—Our fleet customers use our products and services primarily in connection with the purchase of fuel. Accordingly, our revenue is affected by fuel prices, which are subject to significant volatility. A change in retail fuel prices could cause a decrease or increase in our revenue from several sources, including fees paid to us based on a percentage of each customer’s total purchase. Changes in the absolute price of fuel may also impact unpaid account

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balances and the late fees and charges based on these amounts. We estimate approximately 10% and 13% of revenues, net were directly impacted by changes in fuel price in 2023 and 2022, respectively. See "Results of Operations" for information related to the fuel price impact on our total revenues, net.

•Fuel price spread volatility—A portion of our revenue involves transactions where we derive revenue from fuel price spreads, which is the difference between the price charged to a fleet customer for a transaction and the price paid to the merchant for the same transaction. In these transactions, the price paid to the merchant is based on the wholesale cost of fuel. The merchant’s wholesale cost of fuel is dependent on several factors including, among others, the factors described above affecting fuel prices. The fuel price that we charge to our customer is dependent on several factors including, among others, the fuel price paid to the merchant, posted retail fuel prices and competitive fuel prices. We experience fuel price spread contraction when the merchant’s wholesale cost of fuel increases at a faster rate than the fuel price we charge to our customers, or the fuel price we charge to our customers decreases at a faster rate than the merchant’s wholesale cost of fuel. The inverse of these situations produces fuel price spread expansion. We estimate approximately 5% and 6% of revenues, net were directly impacted by fuel price spreads in 2023 and 2022, respectively. See "Results of Operations" for information related to the fuel price impact on our total revenues, net.

•Acquisitions—Since 2002, we have completed over 95 acquisitions of companies and commercial account portfolios. Acquisitions have been an important part of our growth strategy, and it is our intention to continue to seek opportunities to increase our customer base and diversify our service offering through further strategic acquisitions. The impact of acquisitions has, and may continue to have, a significant impact on our results of operations and may make it difficult to compare our results between periods.

•Interest rates—From January 1, 2022 to July 23, 2023, the U.S. Federal Open Market Committee increased the target federal funds rate eleven times for a total rate increase of 5.25%. Additional increases are possible in future periods. We are exposed to market risk changes in interest rates on our debt, particularly in rising interest rate environments, which is partially offset by incremental interest income earned on cash and restricted cash. As of December 31, 2023, we have a number of receive-variable SOFR, pay-fixed interest rate swap derivative contracts with a cumulative notional U.S. dollar value of $4.0 billion. The objective of these contracts is to reduce the variability of cash flows in the previously unhedged interest payments associated with variable rate debt, the sole source of which is due to changes in SOFR benchmark interest rate.

See "Liquidity" section below for additional information regarding our derivatives.

•Expenses—Over the long term, we expect that our expense will decrease as a percentage of revenue as our revenue increases, except for expenses related to transaction volume processed. To support our expected revenue growth, we plan to continue to incur additional sales and marketing expense by investing in our direct marketing, third-party agents, internet marketing, telemarketing and sales force.

•Taxes—We pay taxes in various taxing jurisdictions, including the U.S., most U.S. states and many non-U.S. jurisdictions. The tax rates in non-U.S. taxing jurisdictions are different than the U.S. tax rate. Consequently, as our earnings fluctuate between taxing jurisdictions, our effective tax rate fluctuates.

Acquisitions, Investments and Divestitures

2023

•In January 2023, we acquired Global Reach, a U.K.-based cross border payments provider, for approximately $102.9 million, net of cash. Results from Global Reach Group are reported in our Corporate Payments segment.

•In February 2023, we acquired the remainder of Mina Digital Limited, a cloud-based electric vehicle ("EV") charging software platform, and we also acquired Business Gateway AG, a European-based vehicle maintenance provider, for a total of approximately $23.8 million, net of cash. Results from Mina Digital Limited and Business Gateway AG are reported in our Vehicle Payments segment.

•In September 2023, we acquired PayByPhone Technologies, Inc. a global parking payment application, for approximately $301.6 million, net of cash. Results from PayByPhone are reported in our Vehicle Payments segment.

•In the third quarter of 2023, we disposed of our Russian business for $197.0 million, net of cash disposed and net of a $5.6 million foreign exchange loss upon the conversion of the ruble-denominated proceeds to U.S. dollars. Results from our Russian business were previously included in our Vehicle Payments segment.

Each of these 2023 acquisitions provide incremental geographic expansion of our products, with PayByPhone specifically intended to progress our broader strategy to transform our vehicle payments business.

2022

•In November 2022, we completed the acquisition of Roomex, a European workforce lodging provider serving the U.K. and German markets for approximately $56.8 million, net of cash. Results from Roomex are included in our Lodging Payments segment.

•In September 2022, we made an investment of $6.1 million in a U.K.-based EV search and pay mapping service.

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•In September 2022, we completed the acquisition of Plugsurfing, a European EV software and network provider, for $75.8 million, net of cash. Results from Plugsurfing are reported in our Vehicle Payments segment.

•In August 2022, we completed the acquisition of Accrualify, an accounts payable (AP) automation software company, for $41.2 million, net of cash. Results from Accrualify are reported in our Corporate Payments segment.

•In March 2022, we completed the acquisition of Levarti, a U.S.-based airline software platform company, for $23.7 million, net of cash. Results from Levarti are included in our Lodging Payments segment.

•In February 2022, we made an investment of $7.8 million in Mina Digital Limited, an EV charging payments business and $5.0 million in an EV data analytics business.

Results of Operations

Year ended December 31, 2023 compared to the year ended December 31, 2022

The following table sets forth selected financial information from the consolidated statements of income for the years ended December 31, 2023 and 2022 (in millions, except percentages)*.

*The sum of the columns and rows may not calculate due to rounding.

NM - not meaningful

Consolidated revenues, net

Our consolidated revenues were $3,757.7 million in 2023, an increase of 9.6% compared to the prior year. The increase in consolidated revenues was due primarily to organic growth of 10%, driven by increases in transaction volumes and new sales growth and net revenue growth of 2% from acquisitions completed in 2022 and 2023, partially offset by the macroeconomic

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environment that negatively impacted revenue growth by 1%. Revenues were also negatively impacted in 2023 by the disposition of our Russia business in August 2023 of approximately $50 million, or 1%.

Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a negative impact on our consolidated revenues for 2023 over 2022, driven primarily by the unfavorable impact of lower fuel prices of approximately $39 million and unfavorable fuel price spreads of approximately $15 million. These decreases were partially offset by favorable foreign exchange rates of approximately $16 million, mostly in our Brazil business.

Consolidated operating expenses

Processing. Processing expenses were $819.9 million in 2023, an increase of 7.2% compared to the prior year. Increases in processing expenses were primarily due to approximately $40 million of expenses related to acquisitions completed in 2022 and 2023, higher variable expenses driven by increased transaction volumes and investments to drive future growth. The increases were partially offset by lower bad debt of $10 million due to our shift away from micro-SMB (small-medium business) clients in the U.S. and the impact of the disposition of our Russia business of approximately $3 million.

Selling. Selling expenses were $340.2 million in 2023, an increase of 10.1% compared to the prior year. Increases in selling expenses were primarily associated with approximately $24 million of expenses related to acquisitions completed in 2022 and 2023 and commissions from higher sales volume, partially offset by the impact of the disposition of our Russia business of approximately $4 million.

General and administrative. General and administrative expenses were $603.4 million in 2023, an increase of 3.3% compared to the prior year. Increases in general and administrative expenses were primarily due to the impact of acquisitions completed in 2022 and 2023 of approximately $32 million and other increases associated with the growth of our business over the prior year. These increases were partially offset by approximately $9 million of lower overhead expense, approximately $5 million of lower stock based compensation expense and the impact of the disposition of our Russia business of approximately $5 million.

Depreciation and amortization. Depreciation and amortization expenses were $336.6 million in 2023, an increase of 4.4%. Increases in depreciation and amortization were primarily due to incremental capital investments over the past three years, as well as approximately $17 million due to acquisitions completed in 2022 and 2023, partially offset by the impact of the disposition of our Russia business of approximately $2 million.

Consolidated operating income

Operating income was $1,656.9 million in 2023, an increase of 14.5% compared to the prior year. The increase in operating income was primarily due to the reasons discussed above, resulting in operating income margin expansion of approximately 190 basis points over the prior year. The increase was also impacted by the flow through impact on operating income of favorable changes in foreign exchange rates of approximately $5 million. These favorable effects were offset by the impact on operating income of the disposition of our Russia business in the third quarter of 2023, which resulted in lower operating income of approximately $36 million in 2023 compared to the prior year.

Other (income) expense, net. Other income, net of $16.6 million in 2023 was primarily the net gain of approximately $13.7 million resulting from the disposal of our Russia business during the third quarter of 2023.

Interest expense, net. Interest expense was $348.6 million in 2023, an increase of 111.7% compared to the prior year. The increase in interest expense is primarily due to rising interest rates on our borrowings and net cash used in financing activities, partially offset by the benefit of higher cash balances in certain foreign jurisdictions resulting in an increase in interest income from higher interest rates. The following table sets forth the weighted average interest rates paid on borrowings under our Credit Facility, excluding the related unused facility fees and swaps.

We have a portfolio of interest rate swaps which are designated as cash flow hedges and one cross-currency interest rate swap, which is designated as a net investment hedge. During 2023, as a result of these swap contracts and net investment hedges, we recorded a benefit to interest expense, net of approximately $48 million.

Provision for income taxes. The provision for income taxes and effective tax rate were $343.1 million and 25.9% in 2023, compared to $321.3 million and 25.2% in the prior year. The increase in the provision for income taxes was driven primarily by the increase in income before income taxes, higher foreign withholding taxes and less excess tax benefit on stock option exercises. The increases were partially offset by additional foreign tax credits and tax planning impacts in the fourth quarter of 2023 that resulted in an $8.2 million benefit that lowered the 2023 tax rate by 0.6%.

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Net income. For the reasons discussed above, our net income was $981.9 million in 2023, an increase of 2.9% compared to the prior year.

Segment Results

Vehicle Payments

Vehicle Payments revenues were $2.0 billion in 2023, an increase of 2.8% compared to the prior year. Vehicle Payments revenues increased primarily due to organic growth of 6% driven by new sales growth in our international markets, higher revenue per transaction, as well as the impact of acquisitions, which contributed approximately $14 million in revenue. The increase in revenues was partially offset by the disposition of our Russia business in August 2023, which lowered revenue by approximately $50 million and softness in our small fleet customers based in the U.S. Our shift away from micro-SMB clients in the U.S. affected our sales and overall results, including lower late fees revenues, which were down 19% from the prior year. The macroeconomic environment also negatively impacted revenues by approximately $32 million, driven primarily by the impact of lower fuel prices of $39 million and unfavorable fuel price spreads of $15 million, partially offset by favorable changes in foreign exchange rates on revenue of $21 million.

Vehicle Payments operating income was $943.4 million in 2023, an increase of 6.7% compared to the prior year due to the reasons discussed above and the flow through impact of the disposition of our Russia business, which resulted in lower operating income of approximately $36 million. These unfavorable impacts were partially offset by lower bad debt of approximately $9 million, as we shift away from micro-SMB clients and to higher credit quality customers in the U.S.

Corporate Payments

Corporate Payments revenues were $981.1 million in 2023, an increase of 27.5% compared to the prior year. Corporate Payments revenues increased primarily due to organic revenue growth of 19%, driven by 15% organic growth in spend volume, strong new sales in our AP automation and cross-border solutions, as well as the impact of acquisitions, which contributed approximately $60 million in revenue.

Corporate Payments operating income was $382.1 million in 2023, an increase of 39.7% compared to the prior year. Corporate Payments operating income and margin increased primarily due to revenue growth and operating leverage and integration synergies, as revenues grew faster than expenses, partially offset by higher selling expenses driven by growth of the business.

Lodging Payments

Lodging Payments revenues were $520.2 million in 2023, an increase of 14.0% compared to the prior year. Lodging Payments revenues increased primarily due to organic revenue growth of 12% driven by our insurance and airline verticals, as well as the impact of acquisitions, which contributed approximately $9 million in revenue. Lodging Payments revenues also grew due to sales success across industry verticals, in addition to higher revenue per room night driven primarily from our distressed passenger product and higher hotel commission revenues. Offsetting this growth was softness in our workforce vertical as the weaker macroeconomic environment is impacting this business, resulting in lower room nights. This growth was also impacted by lower same store sales in airlines and insurance in the second half of 2023 over 2022 due to fewer weather events and airline cancellations.

Lodging Payments operating income was $254.3 million in 2023, an increase of 16.3% compared to the prior year. Lodging Payments operating income and margin increased primarily due to revenue growth and our operating leverage, as revenues grew faster than expenses.

Other

Other revenues were relatively flat at $250.9 million in 2023 compared to the prior year. Other operating income was $77.1 million in 2023, an increase of 10.3% compared to the prior year, with the increase primarily due to our operating leverage and disciplined expense management.

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Recast Segment Results - Year Ended December 31, 2021

As discussed above, in the fourth quarter of 2023, in order to align with recent changes in our strategy and resulting organizational structure and management reporting, we updated our segment structure into three reportable segments: Vehicle Payments, Corporate Payments, Lodging Payments and an Other category. The new Vehicle Payments segment includes the prior Fleet and Brazil segments and results from our Corpay One business, which was previously reported in the Corporate Payments segment. The segment change did not impact prior period segment results presented for Lodging Payments or the Other category.

The following table sets forth our recast segment results for the year ended December 31, 2021 (in millions, except percentages).