UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 __________________________________________________________

FORM 10-Q

 _________________________________________________________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 001-35004

 __________________________________________________________

Corpay, Inc.

(Exact name of registrant as specified in its charter)

 __________________________________________________________

Delaware			72-1074903
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
3280 Peachtree Road, Suite 2400	Atlanta	Georgia	30305
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (770) 449-0479

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	CPAY	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at May 2, 2024
Common Stock, $0.001 par value	70,268,506

Corpay, Inc. and Subsidiaries

FORM 10-Q

For the Three Months Ended March 31, 2024

INDEX

 

		Page
PART I—FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS
	Consolidated Balance Sheets at March 31, 2024 (unaudited) and December 31, 2023	1
	Unaudited Consolidated Statements of Income for the Three Months Ended March 31, 2024 and 2023	2
	Unaudited Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2024 and 2023	3
	Unaudited Consolidated Statements of Equity for the Three Months Ended March 31, 2024 and 2023	4
	Unaudited Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	42
Item 4.	CONTROLS AND PROCEDURES	42
PART II—OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS	44
Item 1A.	RISK FACTORS	45
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASE OF EQUITY SECURITIES	45
Item 3.	DEFAULTS UPON SENIOR SECURITIES	45
Item 4.	MINE SAFETY DISCLOSURES	45
Item 5.	OTHER INFORMATION	45
Item 6.	EXHIBITS	46
SIGNATURES		47

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Corpay, Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Share and Par Value Amounts)

	March 31, 2024		December 31, 2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,311,949	$	1,389,648
Restricted cash	1,890,727		1,751,887
Accounts and other receivables (less allowance for credit losses of $184,887 at March 31, 2024 and $180,163 at December 31, 2023)	2,376,003		2,161,586
Securitized accounts receivable—restricted for securitization investors	1,421,000		1,307,000
Prepaid expenses and other current assets	437,687		474,144
Total current assets	7,437,366		7,084,265
Property and equipment, net	351,831		343,154
Goodwill	5,673,732		5,644,958
Other intangibles, net	2,033,106		2,085,663
Investments	68,299		69,521
Other assets	265,797		248,691
Total assets	$	15,830,131	$	15,476,252
Liabilities and equity
Current liabilities:
Accounts payable	$	1,849,958	$	1,624,995
Accrued expenses	408,661		356,118
Customer deposits	2,534,349		2,397,279
Securitization facility	1,421,000		1,307,000
Current portion of notes payable and lines of credit	480,433		819,749
Other current liabilities	256,527		320,612
Total current liabilities	6,950,928		6,825,753
Notes payable and other obligations, less current portion	4,862,621		4,596,156
Deferred income taxes	473,250		470,232
Other noncurrent liabilities	261,062		301,752
Total noncurrent liabilities	5,596,933		5,368,140
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.001 par value; 475,000,000 shares authorized; 129,604,492 shares issued and 71,463,894 shares outstanding at March 31, 2024; and 128,759,639 shares issued and 71,715,804 shares outstanding at December 31, 2023	130		129
Additional paid-in capital	3,382,001		3,266,185
Retained earnings	8,422,428		8,192,659
Accumulated other comprehensive loss	(1,340,847)		(1,289,099)
Less treasury stock, 58,140,598 shares at March 31, 2024 and 57,043,835 shares at December 31, 2023	(7,209,291)		(6,887,515)
Total Corpay stockholders’ equity	3,254,421		3,282,359
Noncontrolling interest	27,849		—
Total equity	3,282,270		3,282,359
Total liabilities and equity	$	15,830,131	$	15,476,252

See accompanying notes to unaudited consolidated financial statements.

1

Corpay, Inc. and Subsidiaries

Unaudited Consolidated Statements of Income

(In Thousands, Except Per Share Amounts)

 

	Three Months Ended March 31,
	2024		2023
Revenues, net	$	935,251	$	901,333
Expenses:
Processing	207,411		204,967
Selling	94,188		81,592
General and administrative	151,262		154,684
Depreciation and amortization	84,760		84,232
Other operating, net	292		663
Operating income	397,338		375,195
Other expenses:
Investment gain	(167)		(190)
Other expense, net	3,127		746
Interest expense, net	89,088		79,795
Total other expense	92,048		80,351
Income before income taxes	305,290		294,844
Provision for income taxes	75,487		80,009
Net income	229,803		214,835
Less: Net income attributable to noncontrolling interest	34		—
Net income attributable to Corpay	$	229,769	$	214,835
Earnings per share:
Basic earnings per share attributable to Corpay	$	3.20	$	2.92
Diluted earnings per share attributable to Corpay	$	3.12	$	2.88
Weighted average shares outstanding:
Basic shares	71,769		73,521
Diluted shares	73,545		74,483

See accompanying notes to unaudited consolidated financial statements.

2

Corpay, Inc. and Subsidiaries

Unaudited Consolidated Statements of Comprehensive Income

(In Thousands)

 

	Three Months Ended March 31,
	2024		2023
Net income	$	229,803	$	214,835
Other comprehensive (loss) income:
Foreign currency translation (losses) gains, net of tax	(96,112)		81,107
Net change in derivative contracts, net of tax	44,122		(5,473)
Total other comprehensive (loss) income, net of tax	(51,990)		75,634
Total comprehensive income	177,813		290,469
Comprehensive loss attributable to noncontrolling interest	208		—
Comprehensive income attributable to Corpay	$	178,021	$	290,469

See accompanying notes to unaudited consolidated financial statements.

3

Corpay, Inc. and Subsidiaries

Unaudited Consolidated Statements of Equity

(In Thousands)

	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Corpay Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance at December 31, 2023	$	129	$	3,266,185	$	8,192,659	$	(1,289,099)	$	(6,887,515)	$	3,282,359	$	—	$	3,282,359
Net income	—		—		229,769		—		—		229,769		34		229,803
Other comprehensive loss, net of tax	—		—		—		(51,748)		—		(51,748)		(242)		(51,990)
Acquisition of noncontrolling interest	—		—		—		—		—		—		28,057		28,057
Acquisition of common stock	—		—		—		—		(321,776)		(321,776)		—		(321,776)
Stock-based compensation	—		24,979		—		—		—		24,979		—		24,979
Issuance of common stock	1		90,837		—		—		—		90,838		—		90,838
Balance at March 31, 2024	$	130	$	3,382,001	$	8,422,428	$	(1,340,847)	$	(7,209,291)	$	3,254,421	$	27,849	$	3,282,270

	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Corpay Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance at December 31, 2022	$	128	$	3,049,570	$	7,210,769	$	(1,509,650)	$	(6,209,324)	$	2,541,493	$	—	$	2,541,493
Net income	—		—		214,835		—		—		214,835		—		214,835
Other comprehensive income, net of tax	—		—		—		75,634		—		75,634		—		75,634
Acquisition of common stock	—		—		—		—		(9,597)		(9,597)		—		(9,597)
Stock-based compensation	—		26,096		—		—		—		26,096		—		26,096
Issuance of common stock	—		33,399		—		—		—		33,399		—		33,399
Balance at March 31, 2023	$	128	$	3,109,065	$	7,425,604	$	(1,434,016)	$	(6,218,921)	$	2,881,860	$	—	$	2,881,860

See accompanying notes to unaudited consolidated financial statements.

4

Corpay, Inc. and Subsidiaries

Unaudited Consolidated Statements of Cash Flows

(In Thousands)

	Three Months Ended
	2024		2023
Operating activities
Net income	$	229,803	$	214,835
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	28,931		25,980
Stock-based compensation	24,979		26,096
Provision for credit losses on accounts and other receivables	25,342		39,270
Amortization of deferred financing costs and discounts	2,029		1,787
Amortization of intangible assets and premium on receivables	55,829		58,252
Deferred income taxes	647		(499)
Investment gain	(167)		(190)
Other non-cash operating expense, net	292		663
Changes in operating assets and liabilities (net of acquisitions):
Accounts and other receivables	(382,889)		372,342
Prepaid expenses and other current assets	(12,587)		40,099
Derivative assets and liabilities, net	1,452		(28,223)
Other assets	(22,021)		25,141
Accounts payable, accrued expenses and customer deposits	398,544		102,112
Net cash provided by operating activities	350,184		877,665
Investing activities
Acquisitions, net of cash acquired	(56,325)		(126,691)
Purchases of property and equipment	(41,193)		(36,737)
Other	(4,826)		4,401
Net cash used in investing activities	(102,344)		(159,027)
Financing activities
Proceeds from issuance of common stock	90,838		33,399
Repurchase of common stock	(288,833)		(9,597)
Borrowings on securitization facility, net	114,000		(3,000)
Deferred financing costs	(3,176)		—
Proceeds from notes payable	325,000		—
Principal payments on notes payable	(25,531)		(23,500)
Borrowings from revolver	1,570,000		1,964,000
Payments on revolver	(1,866,000)		(2,490,000)
(Payments) borrowings on swing line of credit, net	(75,429)		310,719
Other	580		264
Net cash used in financing activities	(158,551)		(217,715)
Effect of foreign currency exchange rates on cash	(28,148)		29,298
Net increase in cash and cash equivalents and restricted cash	61,141		530,221
Cash and cash equivalents and restricted cash, beginning of period	3,141,535		2,289,180
Cash and cash equivalents and restricted cash, end of period	$	3,202,676	$	2,819,401
Supplemental cash flow information
Cash paid for interest	$	115,773	$	104,650
Cash paid for income taxes	$	38,925	$	35,442

See accompanying notes to unaudited consolidated financial statements.

5

Corpay, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

March 31, 2024

1. Summary of Significant Accounting Policies

Basis of Presentation

Throughout this Quarterly Report on Form 10-Q, the terms "our," "we," "us," and the "Company" refers to Corpay, Inc. and its subsidiaries. Effective March 25, 2024, FLEETCOR Technologies, Inc. changed its corporate name to Corpay, Inc. At that time, the Company ceased trading under the ticker symbol "FLT" and began trading under our new ticker symbol, "CPAY," on the New York Stock Exchange ("NYSE") effective March 25, 2024.

The Company prepared the accompanying unaudited interim consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, the unaudited interim consolidated financial statements reflect all adjustments considered necessary for fair presentation. These adjustments consist of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. Actual results may differ from these estimates.

The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. These financial statements were prepared using information reasonably available to us as of March 31, 2024 and through the date of this Quarterly Report. The accounting estimates used in the preparation of the Company’s interim consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from these estimates.

Foreign Currency Translation        

Assets and liabilities of foreign subsidiaries as well as intra-entity balances denominated in foreign currency and designated for long-term investment are translated into U.S. dollars at the rates of exchange in effect at period-end. The related translation adjustments are recorded to accumulated other comprehensive loss. Income and expenses are translated at the average monthly rates of exchange in effect during the year. Gains and losses from foreign currency transactions of these subsidiaries are included in net income. The Company recognized foreign exchange losses, which are recorded within Other expense, net in the Unaudited Consolidated Statements of Income, for the three months ended March 31, 2024 and 2023 as follows (in millions):

	Three Months Ended March 31,
	2024		2023
Foreign exchange losses	$	3.1	$	0.7

The Company recorded foreign currency losses and gains on long-term intra-entity transactions included as a component of Foreign currency translation (losses) gains, net of tax, in the Unaudited Consolidated Statements of Comprehensive Income for the three months ended March 31, 2024 and 2023 as follows (in millions):

	Three Months Ended March 31,
	2024		2023
Foreign currency losses (gains) on long-term intra-entity transactions	$	12.4	$	(4.9)

Cash, Cash Equivalents, and Restricted Cash

Cash equivalents primarily consist of a) cash on hand, b) highly liquid investments with original maturities of three months or less, such as certificates of deposit, treasury bills and money market funds, and c) customer deposits repayable on demand without legal restrictions. Restricted cash primarily represents a) customer deposits repayable on demand held in certain geographies with legal restrictions contractually set aside to fulfill payment obligations on a customer's behalf, b) collateral received from customers for cross-currency transactions in our cross-border payments business, which are restricted from use other than to repay customer deposits and secure and settle cross-currency transactions, and c) collateral posted with banks for hedging positions in our cross-border payments business.

6

Financial Instruments - Credit Losses

The Company accounts for financial assets' expected credit losses in accordance with Accounting Standards Codification (ASC) 326, "Financial Instruments - Credit Losses". The Company’s financial assets subject to credit losses are primarily trade receivables. The Company utilizes 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. The Company's provision for credit losses is recorded within processing expenses in the Unaudited Consolidated Statements of Income.

Revenue

The Company provides payment solutions to our business, merchant, consumer and payment network customers. Our payment solutions are primarily focused on specific commercial spend or geographically-defined categories, including Vehicle Payments, Corporate Payments, Lodging Payments and Other. The Company provides solutions that help businesses of all sizes control, simplify and secure payment of various domestic and cross-border payables using specialized payment products. The Company also provides other payment solutions for fleet maintenance, employee benefits and long haul transportation-related services.

Our revenue is generally reported net of the cost for underlying products and services purchased through our payment solutions. In this report, we refer to this net revenue as "revenue". Revenues from contracts with customers, within the scope of ASC 606, "Revenue Recognition", represent approximately 86% and 87% of total consolidated revenues, net, for the three months ended March 31, 2024 and 2023, respectively. In its cross-border payments business, the Company enters into foreign currency forwards, option derivative contracts and swaps for its customers to facilitate future payments in foreign currencies. These contracts are accounted for in accordance with ASC 815, "Derivatives and Hedging" and represent approximately 7% of total consolidated revenues for the three months ended March 31, 2024 and 2023. Additionally, the Company accounts for revenue from late fees and finance charges, in jurisdictions where permitted under local regulations, primarily in the U.S., Canada and Brazil, in accordance with ASC 310, "Receivables". Such fees are recognized net of a provision for estimated uncollectible amounts, at the time the fees and finance charges are assessed and services are provided and represent approximately 4% and 5% of total consolidated revenues, net for the three months ended March 31, 2024 and 2023, respectively. The Company's remaining revenue represents float revenue earned on invested customer funds in jurisdictions where permitted. Such revenue represented approximately 3% and 1% of consolidated revenues, net for the three months ended March 31, 2024 and 2023, respectively.

Disaggregation of Revenues

Revenues, net by segment for the three months ended March 31, 2024 and 2023 was as follows (in millions, except percentages):

Revenues, net by Segment*	Three Months Ended March 31,
	2024		%		2023		%
Vehicle Payments	$	494.1	53	%	$	495.5	55	%
Corporate Payments	265.4		28	%	226.2		25	%
Lodging Payments	111.3		12	%	122.3		14	%
Other	64.5		7	%	57.3		6	%
Consolidated revenues, net	$	935.3	100	%	$	901.3	100	%

*Columns may not calculate due to rounding.

7

Revenue by geography for the three months ended March 31, 2024 and 2023 was as follows (in millions, except percentages):

Revenues, net by Geography*	Three Months Ended March 31,
	2024		%		2023		%
United States	$	504.6	54	%	$	513.6	57	%
Brazil	148.4		16	%	121.7		14	%
United Kingdom	121.4		13	%	107.7		12	%
Other	160.8		17	%	158.2		18	%
Consolidated revenues, net	$	935.3	100	%	$	901.3	100	%

*Columns may not calculate due to rounding.

Contract Liabilities

Deferred revenue contract liabilities for customers subject to ASC 606 were $42.4 million and $45.7 million as of March 31, 2024 and December 31, 2023, respectively. We expect to recognize approximately $29.4 million of these amounts in revenues within 12 months and the remaining $13.0 million over the next five years as of March 31, 2024. Revenue recognized in the three months ended March 31, 2024 that was included in the deferred revenue contract liability as of December 31, 2023 was approximately $15.7 million.

Spot Trade Offsetting

The Company uses spot trades to facilitate cross-currency corporate payments in its cross-border payments business. The Company applies offsetting to spot trade assets and liabilities associated with contracts that include master netting agreements with the same counterparty, as a right of setoff exists, which the Company believes to be enforceable. As such, the Company has netted spot trade liabilities against spot trade receivables at the counter-party level. The Company recognizes all spot trade assets, net in accounts receivable and all spot trade liabilities, net in accounts payable, each net at the customer level, in its Consolidated Balance Sheets at their fair value. The following table presents the Company’s spot trade assets and liabilities at their fair value at March 31, 2024 and December 31, 2023 (in millions):

	March 31, 2024						December 31, 2023
	Gross		Offset on the Balance Sheet		Net		Gross		Offset on the Balance Sheet		Net
Assets
Accounts Receivable	$	1,881.7	$	(1,713.6)	$	168.1	$	2,499.9	$	(2,373.8)	$	126.1
Liabilities
Accounts Payable	$	1,793.9	$	(1,713.6)	$	80.3	$	2,457.3	$	(2,373.8)	$	83.5

Reclassifications

Segment disclosures for the prior period have been reclassified to conform with current segment presentation.

Recent Accounting Pronouncements Not Yet Adopted

Segment Reporting

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". The amendments are intended to increase reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We are currently evaluating the impact of this guidance on the disclosures within our consolidated financial statements.

Income Taxes

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). The amendments require disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The ASU is effective for fiscal years beginning after December 15, 2024, with early

8

adoption permitted. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the impact that this guidance will have on the disclosures within our consolidated financial statements.

2. Accounts and Other Receivables

The Company's accounts and securitized accounts receivable include the following at March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024		December 31, 2023
Gross domestic accounts receivable	$	999,674	$	921,206
Gross domestic securitized accounts receivable	1,421,000		1,307,000
Gross foreign receivables	1,561,216		1,420,543
Total gross receivables	3,981,890		3,648,749
Less allowance for credit losses	(184,887)		(180,163)
Net accounts and securitized accounts receivables	$	3,797,003	$	3,468,586

The Company maintains a $1.7 billion revolving trade accounts receivable securitization facility (as amended from time to time, the "Securitization Facility"). Accounts receivable collateralized within our Securitization Facility primarily relate to trade receivables resulting primarily from charge card activity and other customer receivables in the U.S. Pursuant to the terms of the Securitization Facility, the Company transfers in the form of a legal sale certain of its domestic receivables, on a revolving basis, to FLEETCOR Funding LLC ("Funding"), a wholly-owned bankruptcy remote consolidated subsidiary. In turn, Funding transfers in the form of a legal sale, without recourse, on a revolving basis, an undivided ownership interest in this pool of accounts receivable to unrelated transferees (i.e., multi-seller banks and asset-backed commercial paper conduits). Funding retains a residual, subordinated interest in cash flow distribution from the transferred receivables and provides to the transferees an incremental pledge of unsold receivables as a form of over-collateralization to enhance the credit of the transferred receivables. Purchases by the banks and conduits are generally financed with the sale of highly-rated commercial paper.

The Company utilizes proceeds from the securitized assets as an alternative to other forms of financing to reduce its overall borrowing costs. The Company has agreed to continue servicing the sold receivables for the financial institution at market rates, which approximates the Company’s cost of servicing. Funding determines the level of funding achieved by the sale of trade accounts receivable, subject to a maximum amount. As the Company maintains certain continuing involvement in the transferred/sold receivables, it does not derecognize the receivables from its Consolidated Balance Sheets. Instead, the Company records cash proceeds and any residual interest received as a Securitization Facility liability.

The Company’s Consolidated Balance Sheets and Statements of Income reflect the activity related to securitized accounts receivable and the corresponding securitized debt, including interest income, fees generated from late payments, provision for losses on accounts receivable and interest expense. The cash flows from borrowings and repayments associated with the securitized debt are presented as cash flows from financing activities. The maturity date for the Company's Securitization Facility is August 18, 2025.

A roll forward of the Company’s allowance for credit losses related to accounts receivable for the three months ended March 31, 2024 and 2023 is as follows (in thousands):

	2024		2023
Allowance for credit losses beginning of period	$	180,163	$	149,846
Provision for credit losses	25,342		39,270
Write-offs	(19,532)		(34,128)
Recoveries	3,093		2,444
Impact of foreign currency	(4,179)		3,156
Allowance for credit losses end of period	$	184,887	$	160,588

The provision for credit losses and write-offs decreased during the three months ended March 31, 2024 versus the comparable prior period primarily due to improved customer loss rates in the Company's U.S. Vehicle Payments business.

3. Fair Value Measurements

A three-tier value hierarchy prioritizes the inputs used in measuring fair value as follows: 

•Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

•Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or

9

liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

•Level 3: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

The following table presents the Company’s financial assets and liabilities which are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 (in thousands):

	Fair Value		Level 1		Level 2		Level 3
March 31, 2024
Assets:
Overnight deposits	$	252,146	$	—	$	252,146	$	—
Money market	149,686		—		149,686		—
Certificates of deposit	285,313		—		285,313		—
Treasury bills	59,075		—		59,075		—
Interest rate swaps	36,654		—		36,654		—
Cross-currency interest rate swap	7,922		—		7,922		—
Foreign exchange contracts	252,914		—		252,914		—
Total assets	$	1,043,710	$	—	$	1,043,710	$	—
Cash collateral for foreign exchange contracts	$	36,929
Liabilities:
Interest rate swaps	$	16,823	$	—	16,823		—
Cross-currency interest rate swap	9,498		—		9,498		—
Foreign exchange contracts	178,895		—		178,895		—
Total liabilities	$	205,216	$	—	$	205,216	$	—
Cash collateral obligation for foreign exchange contracts	$	155,781
December 31, 2023
Assets:
Overnight deposits	$	256,466	$	—	$	256,466	$	—
Money market	376,465		—		376,465		—
Certificates of deposit	266,316		—		266,316		—
Treasury bills	236,505		—		236,505		—
Interest rate swaps	23,485		—		23,485		—
Foreign exchange contracts	320,216		—		320,216		—
Total assets	$	1,479,453	$	—	$	1,479,453	$	—
Cash collateral for foreign exchange contracts	$	39,219
Liabilities:
Interest rate swaps	$	55,796	$	—	$	55,796	$	—
Cross-currency interest rate swap	14,522		—		14,522		—
Foreign exchange contracts	244,745		—		244,745		—
Total liabilities	$	315,063	$	—	$	315,063	$	—
Cash collateral obligation for foreign exchange contracts	$	180,168

10

The Company has highly-liquid investments classified as cash equivalents, with original maturities of 90 days or less, included in our Consolidated Balance Sheets. The Company utilizes Level 2 fair value determinations derived from directly or indirectly observable (market based) information to determine the fair value of these highly liquid investments. The Company has certain cash and cash equivalents that are invested in highly liquid investments, such as, overnight deposits, money markets, certificates of deposit and Treasury bills, with purchased maturities ranging from overnight to 90 days or less. The value of overnight deposits is determined based upon the quoted market prices for the treasury securities associated with the deposit. The value of money market instruments is determined based upon the financial institutions' month-end statement, as these instruments are not tradable and must be settled directly by us with the respective financial institution. Certificates of deposit and certain U.S. Treasury bills are valued at cost, plus interest accrued. Given the short-term nature of these instruments, the carrying value approximates fair value. Foreign exchange derivative contracts are carried at fair value, with changes in fair value recognized in the Consolidated Statements of Income. The fair value of the Company's derivatives is derived with reference to a valuation from a derivatives dealer operating in an active market, which approximates the fair value of these instruments. The fair value represents the net settlement if the contracts were terminated as of the reporting date. Cash collateral received for foreign exchange derivatives is recorded within customer deposits liability in our Consolidated Balance Sheets at March 31, 2024 and December 31, 2023. Cash collateral deposited for foreign exchange derivatives is recorded within restricted cash in our Consolidated Balance Sheets at March 31, 2024 and December 31, 2023.

The level within the fair value hierarchy and the measurement technique are reviewed quarterly. Transfers between levels are deemed to have occurred at the end of the quarter. There were no transfers between fair value levels during the periods presented for March 31, 2024 and December 31, 2023.

The Company’s assets that are measured at fair value on a nonrecurring basis and are evaluated with periodic testing for impairment include property, plant and equipment, investments, goodwill and other intangible assets. Estimates of the fair value of assets acquired and liabilities assumed in business combinations are generally developed using key inputs such as management’s projections of cash flows on a held-and-used basis (if applicable), discounted as appropriate, management’s projections of cash flows upon disposition and discount rates. Accordingly, these fair value measurements are in Level 3 of the fair value hierarchy.

The Company's derivatives are over-the-counter instruments with liquid markets. The Company determines the fair values of its derivatives based on quoted market prices for similar assets or liabilities or pricing models using current market rates. Accordingly, these fair value measurements are in Level 2 of the fair value hierarchy. The amounts exchanged are calculated by reference to the notional amounts and by other terms of the derivatives, such as interest rates, foreign currency exchange rates, commodity rates or other financial indices. See Note 13 for additional information on the fair value of the Company’s derivatives.

The Company regularly evaluates the carrying value of its investments. The carrying amount of investments without readily determinable fair values was $68.3 million and $69.5 million at March 31, 2024 and December 31, 2023, respectively.

The fair value of the Company’s cash, accounts receivable, securitized accounts receivable and related facility, prepaid expenses and other current assets, accounts payable, accrued expenses, customer deposits and short-term borrowings approximate their respective carrying values due to the short-term maturities of the instruments. The carrying value of the Company’s debt obligations approximates fair value as the interest rates on the debt are variable market based interest rates that reset on a monthly basis. These are each Level 2 fair value measurements, except for cash, which is a Level 1 fair value measurement.

4. Stockholders' Equity

The Company's Board of Directors (the "Board") has approved a stock repurchase program (as updated from time to time, the "Program") authorizing the Company to repurchase its common stock from time to time until February 4, 2025. On January 25, 2024, the Board authorized an increase to the aggregate size of the Program by $1.0 billion to $8.1 billion.

During the three months ended March 31, 2024, the Company repurchased 1,096,762 shares for an aggregate purchase price of $321.3 million (including repurchases of $32.6 million that have not yet settled in cash and are included in accrued expenses in the Consolidated Balance Sheet at March 31, 2024). Since the beginning of the Program through March 31, 2024, 29,975,624 shares have been repurchased for an aggregate purchase price of $6.9 billion, leaving the Company up to $1.2 billion of remaining authorization available under the Program for future repurchases in shares of its common stock. Subsequent to March 31, 2024 and through the date of this filing, the Company repurchased an additional 1.4 million shares for an aggregate purchase price of $412.4 million.

5. Stock-Based Compensation

The following table summarizes the expense recognized within general and administrative expenses in the Unaudited Consolidated Statements of Income related to stock-based compensation for the three months ended March 31, 2024 and 2023 (in thousands):

11

12

	Three Months Ended March 31,
	2024		2023
Stock options	$	6,119	$	8,950
Restricted stock	18,860		17,146
Stock-based compensation	$	24,979	$	26,096

The tax benefits recorded on stock-based compensation and upon the exercises of options were $15.0 million and $4.4 million for the three months ended March 31, 2024 and 2023, respectively.

The following table summarizes the Company’s total unrecognized compensation cost related to outstanding stock awards as of March 31, 2024 (cost in thousands):

	Unrecognized Compensation Cost		Weighted Average Period of Expense Recognition Remaining (in Years)
Stock options	$	52,539	2.35
Restricted stock	76,494		1.05
Total	$	129,033

Stock Options

The following summarizes the changes in the number of shares of stock options outstanding for the three months ended March 31, 2024 (shares and aggregate intrinsic value in thousands):

	Shares	Weighted Average Exercise Price		Options Exercisable at End of Period	Weighted Average Exercise Price of Exercisable Options		Weighted Average Fair Value of Options Granted  During the Period		Aggregate Intrinsic Value
Outstanding at December 31, 2023	4,983	$	192.18	3,182	$	163.54			$	451,039
Granted	138	251.10					$	95.87
Exercised	(539)	167.72							$	64,000
Forfeited	(14)	223.39
Outstanding at March 31, 2024	4,568	$	197.22	2,851	$	167.09			$	508,550
Expected to vest as of March 31, 2024	866	$	234.40

The aggregate intrinsic value of stock options exercisable at March 31, 2024 was $468.4 million. The weighted average remaining contractual term of options exercisable at March 31, 2024 was 2.3 years.

Restricted Stock

The following table summarizes the changes in the number of shares of restricted stock awards and restricted stock units outstanding for the three months ended March 31, 2024 (shares in thousands):

 

	Shares	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	542	$	219.63
Granted	233	269.30
Issued	(311)	219.07
Cancelled	(36)	216.33
Outstanding at March 31, 2024	428	$	243.72

13

6. Acquisitions

2024 Acquisitions

In March 2024, the Company acquired 70% of Zapay, a Brazil-based digital consumer mobility solution for paying vehicle-related taxes and compliance fees, for approximately $56.3 million, net of cash. As part of the agreement, the Company has the right to acquire the remainder of Zapay in four years from the acquisition date. The majority investment in Zapay further scales the Company's Vehicle Payments business in Brazil. Results from the Zapay acquisition have been included in the Company's Vehicle Payments segment from the date of the acquisition.

Acquisition accounting is preliminary for the Zapay acquisition as the Company is still completing the valuation for intangible assets, income taxes, working capital, and contingencies. As the Zapay acquisition occurred near the end of the first quarter of 2024, the Company preliminarily allocated the excess of the purchase price of the acquisition over the estimated assets acquired and liabilities assumed to goodwill and intangibles on a provisional basis, based on historical valuation outcomes. Further, the provisional amounts assigned to such intangibles of $18.6 million were preliminarily assigned to the customer relationship intangible asset. The provisional estimated fair value of the noncontrolling interest was based on the price the Company paid for its 70% controlling interest.

The following table summarizes the preliminary acquisition accounting for the Zapay acquisition noted above (in thousands):

Trade and other receivables	$	2,542
Prepaid expenses and other current assets	112
Other long term assets	960
Goodwill	77,846
Intangibles	18,624
Accounts payable	(1,486)
Other current liabilities	(7,884)
Other noncurrent liabilities	(6,332)
Total fair value of net assets acquired	$	84,382
Less: Noncontrolling interest	(28,057)
Aggregate purchase price	$	56,325

2023 Acquisitions

In January 2023, the Company acquired 100% of Global Reach, a U.K.-based cross-border payments provider, for approximately $102.9 million, net of cash. In February 2023, the Company acquired the remainder of Mina Digital Limited ("Mina"), a cloud-based electric vehicle ("EV") charging software platform. In February 2023, the Company also acquired 100% of Business Gateway AG, a European-based service, maintenance and repair technology provider. In September 2023, the Company acquired 100% of PayByPhone Technologies, Inc., the world's second largest mobile parking operator, for approximately $301.6 million, net of cash. Each of these 2023 acquisitions provide incremental geographic expansion of our products, with PayByPhone specifically intended to progress the Company's broader strategy to transform our vehicle payments business. Results from these acquisitions have been included in the Company's consolidated results from the respective date of each acquisition.

The aggregate purchase price of these acquisitions was approximately $436.7 million (inclusive of the $8.5 million previously-held equity method investment in Mina), net of cash of $117 million. The Company financed the acquisitions using a combination of available cash and borrowings under its existing credit facility. Any noncompete agreements signed in conjunction with these acquisitions were accounted for separately from the business acquisition.

Acquisition accounting is preliminary for PayByPhone as the Company is still completing the valuation for intangible assets, income taxes, working capital, and contingencies. Acquisition accounting for the other 2023 acquisitions was finalized during the first quarter of 2024 as the measurement period closed. There were no material measurement period adjustments recorded during the three months ended March 31, 2024.

14

The following table summarizes the acquisition accounting, in aggregate, for the business acquisitions noted above (in thousands):

Trade and other receivables	$	6,004
Prepaid expenses and other current assets	46,425
Other long term assets	13,302
Goodwill	383,851
Intangibles	158,689
Accounts payable	(24,842)
Other current liabilities	(129,561)
Other noncurrent liabilities	(18,923)
Aggregate purchase price	$	434,945

The estimated fair value of intangible assets acquired and the related estimated useful lives consisted of the following (in thousands):

	Useful Lives (in Years)	Value
Trade names and trademarks	2 to Indefinite	$	12,459
Proprietary technology	5 to 7	11,885
Customer relationships	6 to 20	134,345
		$	158,689

Results from the Global Reach Group are included in the Company's Corporate Payments segment and the results for Mina Digital Limited, Business Gateway AG and PayByPhone are included in the Company's Vehicle Payments segment.

7. Goodwill and Other Intangibles

A summary of changes in the Company’s goodwill is as follows (in thousands):

 

	December 31, 2023		Acquisitions1		Acquisition Accounting Adjustments		Foreign Currency		March 31, 2024
Goodwill	$	5,644,958	$	77,846	$	1,058	$	(50,130)	$	5,673,732

1 Reflects the recognition of goodwill assigned to the Vehicle Payments segment related to the Zapay acquisition completed by the Company during the three months ended March 31, 2024.

As of March 31, 2024 and December 31, 2023, other intangibles consisted of the following (in thousands):

		March 31, 2024						December 31, 2023
	Weighted- Avg Useful Lives (Years)	Gross Carrying Amounts		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amounts		Accumulated Amortization		Net Carrying Amount
Customer and vendor relationships	16.2	$	3,038,204	$	(1,542,504)	$	1,495,700	$	3,044,522	$	(1,511,173)	$	1,533,349
Trade names and trademarks—indefinite lived	N/A	436,204		—		436,204		440,900		—		440,900
Trade names and trademarks—other	2.0	50,684		(16,420)		34,264		51,510		(15,334)		36,176
Software	5.8	297,498		(242,477)		55,021		299,780		(238,819)		60,961
Non-compete agreements	4.2	84,256		(72,339)		11,917		85,111		(70,834)		14,277
Total other intangibles		$	3,906,846	$	(1,873,740)	$	2,033,106	$	3,921,823	$	(1,836,160)	$	2,085,663
N/A = Not Applicable

Changes in foreign exchange rates resulted in $15.4 million decrease to the net carrying values of other intangibles in the three months ended March 31, 2024. Amortization expense related to intangible assets for the three months ended March 31, 2024 and 2023 was $55.8 million and $57.7 million, respectively.

15

8. Debt

The Company is party to a $7.0 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 includes a term loan A, a term loan B, and a revolving credit facility. As noted in footnote 2, the Company is also party to the Securitization Facility.

The balances of the Company’s debt instruments under the Credit Agreement and the Securitization Facility are as follows (in thousands):

	March 31, 2024		December 31, 2023
Term Loan A note payable, net of discounts	$	3,185,375	$	2,882,595
Term Loan B note payable, net of discounts	1,836,326		1,840,244
Revolving line of credit facilities	320,014		692,318
Other obligations	1,339		748
Total notes payable, credit agreements, and other obligations	5,343,054		5,415,905
Securitization Facility	1,421,000		1,307,000
Total debt	$	6,764,054	$	6,722,905
Current portion	$	1,901,433	$	2,126,749
Long-term portion	4,862,621		4,596,156
Total debt	$	6,764,054	$	6,722,905

The Company was in compliance with all financial and non-financial covenants under the Credit Agreement and Securitization Facility at March 31, 2024.

The contractual maturities of the Company’s total debt at March 31, 2024 were as follows (in thousands): 

Remaining 2024	$	439,562
2025	185,250
2026	185,250
2027	2,774,312
2028	1,778,375
Thereafter	—
Total principal payments	5,362,749
Less: debt discounts and issuance costs included in debt	(19,695)
Total debt	$	5,343,054

9. Income Taxes

The Company's effective tax rate was 24.7% and 27.1% for the three months ended March 31, 2024 and 2023, respectively. Income tax expense is based on an estimated annual effective rate, which requires the Company to make its best estimate of annual pretax accounting income or loss before consideration of tax or benefit discretely recognized in the period in which such occur. Our effective income tax rate for the three months ended March 31, 2024 differs from the U.S. federal statutory rate due primarily to the unfavorable impact of state taxes net of federal benefits, additional taxes on undistributed foreign-sourced income, and foreign withholding taxes on interest income from intercompany notes. For the three months ended March 31, 2024, the effective tax rate decreased due to discrete items of $8.5 million mainly attributable to tax benefits arising from stock option exercises and awards vesting.

16

10. Earnings Per Share

The Company reports basic and diluted earnings per share. Basic earnings per share is computed by dividing net income attributable to shareholders of the Company by the weighted average number of common shares outstanding during the reported period. Diluted earnings per share reflect the potential dilution related to equity-based incentives using the treasury stock method. The calculation and reconciliation of basic and diluted earnings per share attributable to Corpay for the three months ended March 31, 2024 and 2023 is as follows (in thousands, except per share data):

 

	Three Months Ended March 31,
	2024		2023
Net income attributable to Corpay	$	229,769	$	214,835
Denominator for basic earnings per share	71,769		73,521
Dilutive securities	1,776		962
Denominator for diluted earnings per share	73,545		74,483
Basic earnings per share attributable to Corpay	$	3.20	$	2.92
Diluted earnings per share attributable to Corpay	$	3.12	$	2.88

Diluted earnings per share attributable to Corpay for the three months ended March 31, 2024 and 2023 excludes the effect of 0.3 million and 2.4 million shares, respectively, of common stock that may be issued upon the exercise of employee stock options because such effect would be anti-dilutive. Diluted earnings per share attributable to Corpay also excludes the effect of an immaterial amount of performance-based restricted stock for which the performance criteria have not yet been achieved for the three month periods ended March 31, 2024 and 2023.

11. Segments

The Company reports information about its operating segments in accordance with the authoritative guidance related to segments. We manage and report our operating results through three reportable segments: Vehicle Payments, Corporate Payments and Lodging Payments. Our Gift and Payroll Card operating segments included within Other. These segments align with how the Chief Operating Decision Maker (CODM) allocates resources, assesses performance and reviews financial information.

17

The Company’s segment results are as follows for the three month periods ended March 31, 2024 and 2023 (in thousands):

	Three Months Ended March 31,
	20241		20232
Revenues, net:
Vehicle Payments	$	494,061	$	495,490
Corporate Payments	265,396		226,172
Lodging Payments	111,295		122,334
Other	64,499		57,337
	$	935,251	$	901,333
Operating income:
Vehicle Payments	$	225,695	$	223,480
Corporate Payments	104,711		80,382
Lodging Payments	47,276		54,563
Other	19,656		16,770
	$	397,338	$	375,195
Depreciation and amortization:
Vehicle Payments	$	50,321	$	50,350
Corporate Payments	20,803		20,160
Lodging Payments	11,630		11,398
Other	2,006		2,324
	$	84,760	$	84,232

1Results from Zapay acquired in the first quarter of 2024 are reported in the Vehicle Payments segment from the date of acquisition.

2 Results of the Company's Russian business disposed of in August 2023 are included in the Vehicle Payments segment for all periods prior to disposition.

12. Commitments and Contingencies

In the ordinary course of business, the Company is involved in various pending or threatened legal actions, arbitration proceedings, claims, subpoenas, and matters relating to compliance with laws and regulations (collectively, "legal proceedings"). Based on our current knowledge, management presently does not believe that the liabilities arising from these legal proceedings will have a material adverse effect on our consolidated financial condition, results of operations or cash flows. However, it is possible that the ultimate resolution of these legal proceedings could have a material adverse effect on our results of operations and financial condition for any particular period.

Derivative Lawsuits

On July 10, 2017, a shareholder derivative complaint was filed against the Company and certain of the Company’s directors and officers in the United States District Court for the Northern District of Georgia ("Federal Derivative Action") seeking recovery from the Company. The District Court dismissed the Federal Derivative Action on October 21, 2020, and the United States Court of Appeals for the Eleventh Circuit affirmed the dismissal on July 27, 2022, ending the lawsuit. A similar derivative lawsuit that had been filed on January 9, 2019 in the Superior Court of Gwinnett County, Georgia (“State Derivative Action”) was likewise dismissed on October 31, 2022.

On January 20, 2023, the previous State Derivative Action plaintiffs filed a new derivative lawsuit in the Superior Court of Gwinnett County, Georgia. The new lawsuit, City of Aventura Police Officers’ Retirement Fund, derivatively on behalf of FleetCor Technologies, Inc. v. Ronald F. Clarke and Eric R. Dey, alleges that the defendants breached their fiduciary duties by causing or permitting the Company to engage in unfair or deceptive marketing and billing practices, making false and misleading public statements concerning the Company’s fee charges and financial and business prospects, and making improper sales of stock. The complaint seeks approximately $118 million in monetary damages on behalf of the Company, including contribution by defendants as joint tortfeasors with the Company in unfair and deceptive practices, and disgorgement of incentive pay and stock compensation. On January 24, 2023, the previous Federal Derivative Action plaintiffs filed a similar new derivative lawsuit, Jerrell Whitten, derivatively on behalf of FleetCor Technologies, Inc. v. Ronald F. Clarke and Eric R. Dey, against Mr. Clarke and Mr. Dey in Gwinnett County, Georgia. On May 1, 2024, both pending derivative cases were transferred to the Fulton County Metro Atlanta Business Case Division and consolidated as In re Corpay, Inc. Shareholder

18

Derivative Litigation, CAFN 2023CV383303 (consolidated with CAFN 2023CV381421). The defendants dispute the allegations in the consolidated derivative action and intend to vigorously defend against the claims.

FTC Investigation

In October 2017, the Federal Trade Commission ("FTC") issued a Notice of Civil Investigative Demand to the Company for the production of documentation and a request for responses to written interrogatories. After discussions with the Company, the FTC proposed in October 2019 to resolve potential claims relating to the Company’s advertising and marketing practices, principally in its U.S. direct fuel card business within its North American Fuel Card business. The parties reached impasse primarily related to what the Company believes are unreasonable demands for redress made by the FTC.

On December 20, 2019, the FTC filed a lawsuit in the Northern District of Georgia against the Company and Ron Clarke. See FTC v. FLEETCOR and Ronald F. Clarke, No. 19-cv-05727 (N.D. Ga.). The complaint alleges the Company and Clarke violated the FTC Act’s prohibitions on unfair and deceptive acts and practices. The complaint seeks among other things injunctive relief, consumer redress, and costs of suit. The Company continues to believe that the FTC’s claims are without merit. On April 17, 2021, the FTC filed a motion for summary judgment. On April 22, 2021, the United States Supreme Court held unanimously in AMG Capital Management v. FTC that the FTC does not have authority under current law to seek monetary redress by means of Section 13(b) of the FTC Act, which is the means by which the FTC has sought such redress in this case. FLEETCOR cross-moved for summary judgment regarding the FTC’s ability to seek monetary or injunctive relief on May 17, 2021. On August 13, 2021, the FTC filed a motion to stay or to voluntarily dismiss without prejudice the case pending in the Northern District of Georgia in favor of a parallel administrative action under Section 5 of the FTC Act that it filed on August 11, 2021 in the FTC’s administrative process. Apart from the jurisdiction and statutory change, the FTC’s administrative complaint makes the same factual allegations as the FTC’s original complaint filed in December 2019. The Company opposed the FTC’s motion for a stay or to voluntarily dismiss, and the court denied the FTC’s motion on February 7, 2022. In the meantime, the FTC’s administrative action is stayed. On August 9, 2022, the District Court for the Northern District of Georgia granted the FTC's motion for summary judgment as to liability for the Company and Ron Clarke, but granted the Company's motion for summary judgment as to the FTC's claim for monetary relief as to both the Company and Ron Clarke. The Company intends to appeal this decision after final judgment is issued. On October 20-21, 2022, the court held a hearing on the scope of injunctive relief. At the conclusion of the hearing, the Court did not enter either the FTC’s proposed order or the Company’s proposed order, and instead suggested that the parties enter mediation. Following mediation, both parties filed proposed orders with the Court.

On June 8, 2023, the Court issued an Order for Permanent Injunction and Other Relief. The Company filed its notice of appeal to the United States Court of Appeals for the Eleventh Circuit on August 3, 2023. On August 17, 2023, the FTC Commission ordered that the stay of the parallel Section 5 administrative action will remain in place during the pendency of the Eleventh Circuit appeal. The Company has incurred and continues to incur legal and other fees related to this FTC complaint. Any settlement of this matter, or defense against the lawsuit, could involve costs to the Company, including legal fees, redress, penalties, and remediation expenses.

Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult and requires an extensive degree of judgment, particularly where, as here, the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, the Company is currently unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from, the matters described above.

13. Derivative Financial Instruments and Hedging Activities

Foreign Currency Derivatives

The Company uses derivatives to facilitate cross-currency corporate payments by writing derivatives to customers within its cross-border solution. The Company writes derivatives, primarily foreign currency forward contracts, option contracts, and swaps, mostly with small and medium size enterprises that are customers and derives a currency spread from this activity.

Derivative transactions associated with the Company's cross-border solution include:

•Forward contracts, which are commitments to buy or sell at a future date a currency at a contract price and will be settled in cash.

•Option contracts, which give the purchaser the right, but not the obligation, to buy or sell within a specified time a currency at a contracted price that may be settled in cash.

•Swap contracts, which are commitments to settlement in cash at a future date or dates, usually on an overnight basis.

The credit risk inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. Concentrations of credit and performance risk may exist with counterparties, which includes customers and banking partners, as the Company is engaged in similar activities with similar economic characteristics related to fluctuations in foreign currency rates. The Company performs a review of the credit risk of these counterparties at the inception

19

of the contract and on an ongoing basis. The Company also monitors the concentration of its contracts with any individual counterparty against limits at the individual counterparty level. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements, but takes action when doubt arises about the counterparties' ability to perform. These actions may include requiring customers to post or increase collateral, and for all counterparties, if the counterparty does not perform under the term of the contract, the contract may be terminated. The Company does not designate any of its foreign exchange derivatives as hedging instruments in accordance with ASC 815, "Derivatives and Hedging".

The aggregate equivalent U.S. dollar notional amount of foreign exchange derivative customer contracts held by the Company was $63.1 billion and $56.6 billion as of March 31, 2024 and December 31, 2023. The majority of customer foreign exchange contracts are written in currencies such as the U.S. dollar, Canadian dollar, British pound, euro and Australian dollar.

The following table summarizes the fair value of derivatives reported in the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 (in millions):

	March 31, 2024
	Fair Value, Gross				Fair Value, Net
	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Derivatives - undesignated:
Foreign exchange contracts	$	484.4	$	410.4	$	252.9	$	178.9
Less: Cash collateral	36.9		155.8		36.9		155.8
Total net derivative assets and liabilities	$	447.5	$	254.6	$	216.0	$	23.1

	December 31, 2023
	Fair Value, Gross				Fair Value, Net
	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Derivatives - undesignated:
Foreign exchange contracts	$	594.9	$	519.4	$	320.2	$	244.7
Less: Cash collateral	39.2		180.2		39.2		180.2
Total net derivative assets and liabilities	$	555.7	$	339.2	$	281.0	$	64.5

The fair values of derivative assets and liabilities associated with contracts, which include netting terms that the Company believes to be enforceable, have been recorded net within prepaid expenses and other current assets, other assets, other current liabilities and other noncurrent liabilities in the Consolidated Balance Sheets. The Company receives cash from customers as collateral for trade exposures, which is recorded within cash and cash equivalents, restricted cash and customer deposits liability in the Consolidated Balance Sheets. The customer has the right to recall their collateral in the event exposures move in their favor, they perform on all outstanding contracts and have no outstanding amounts due to the Company, or they cease to do business with the Company. The Company has trading lines with several banks, most of which require collateral to be posted if certain mark-to-market (MTM) thresholds are exceeded. Cash collateral posted with banks is recorded within restricted cash and can be recalled in the event that exposures move in the Company’s favor or move below the collateral posting thresholds. The Company does not offset fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral. Cash flows from the Company's foreign currency derivatives are classified as operating activities within the Unaudited Consolidated Statements of Cash Flows. The following table presents the fair value of the Company’s derivative assets and liabilities, as well as their classification on the accompanying Consolidated Balance Sheets, as of March 31, 2024 and December 31, 2023 (in millions): 

		March 31, 2024		December 31, 2023
	Balance Sheet Classification	Fair Value
Derivative Assets	Prepaid expenses and other current assets	$	193.4	$	254.2
Derivative Assets	Other assets	$	59.5	$	66.0
Derivative Liabilities	Other current liabilities	$	131.4	$	190.4
Derivative Liabilities	Other noncurrent liabilities	$	47.5	$	54.3

20

Cash Flow Hedges

On January 22, 2019, the Company entered into three interest rate swap cash flow contracts (the "swap contracts"). One contract (which matured in January 2022) had a notional value of $1.0 billion, while the other two contracts (with maturity dates of January 2023 and December 2023) each had a notional value of $500 million. The objective of these swap contracts was to reduce the variability of cash flows in the previously unhedged interest payments associated with $2.0 billion of unspecified variable rate debt, the sole source of which is due to changes in the LIBOR benchmark interest rate. At inception, the Company designated these contracts as hedging instruments in accordance with ASC 815, "Derivatives and Hedging."

During January 2023, the Company entered into five receive-variable Secured Overnight Financing Rate ("SOFR"), pay-fixed interest rate swap derivative contracts with a cumulative notional U.S. dollar value of $1.5 billion as shown disaggregated in the table below.

On May 4, 2023, the Company amended the remaining LIBOR-based interest rate swap with a notional amount of $500 million from one-month term LIBOR of 2.55% to one-month term SOFR of 2.50%, without further changes to the terms of the swap. The Company applied certain expedients provided in ASU No. 2020-04, Reference Rate Reform (Topic 848), related to changes in critical terms of the hedging relationships due to reference rate reform, which allowed the change in critical terms without dedesignation of the hedging relationship.

In August 2023, the Company entered into eight additional receive-variable SOFR, pay-fixed interest rate swap derivative contracts with a cumulative notional U.S. dollar value of $2.0 billion as shown disaggregated in the table below. Further, in December 2023, the Company entered into five additional receive-variable SOFR, pay-fixed interest rate swap derivative contracts with a total notional U.S. dollar value of $500 million as shown disaggregated in the table below.

As of March 31, 2024, the Company 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):

Notional Amount	Fixed Rates	Maturity Date
$250	4.01%	7/31/2025
$250	4.02%	7/31/2025
$500	3.80%	1/31/2026
$250	3.71%	7/31/2026
$250	3.72%	7/31/2026
$100	4.35%	7/31/2026
$250	4.40%	7/31/2026
$250	4.40%	7/31/2026
$400	4.33%	7/31/2026
$250	4.29%	1/31/2027
$250	4.29%	1/31/2027
$250	4.19%	7/31/2027
$250	4.19%	7/31/2027
$150	3.87%	1/31/2027
$50	3.83%	1/31/2027
$50	3.85%	1/31/2027
$125	4.00%	1/31/2028
$125	3.99%	1/31/2028

The purpose of these contracts is to reduce the variability of cash flows in interest payments associated with the Company's unspecified variable rate debt, the sole source of which is due to changes in the SOFR benchmark interest rate. The Company has designated these derivative instruments as cash flow hedging instruments, which are expected to be highly effective at offsetting changes in cash flows of the related underlying exposure. As a result, changes in fair value of the interest rate swaps are recorded in accumulated other comprehensive loss. For each of these swap contracts, the Company pays a fixed monthly rate and receives one month SOFR. The Company reclassified $12.7 million and $5.1 million from accumulated other comprehensive loss resulting in a benefit to interest expense, net for the three months ended March 31, 2024 and 2023, respectively, related to these interest rate swap contracts. Cash flows related to the Company's interest rate swap derivatives are classified as operating activities within the Unaudited Consolidated Statements of Cash Flows, as such cash flows relate to hedged interest payments recorded in operating activities.

21

For derivatives accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. The Company formally assesses, both at the inception and at least quarterly thereafter, whether the financial instruments used in hedging transactions are highly effective at offsetting changes in cash flows of the related underlying exposures.

The following table presents the fair value of the Company’s interest rate swap contracts, as well as their classification on the accompanying Consolidated Balance Sheets, as of March 31, 2024 and December 31, 2023 (in millions). See Note 3 for additional information on the fair value of the Company’s swap contracts.

		March 31, 2024		December 31, 2023
	Balance Sheet Classification	Fair Value
Derivatives designated as cash flow hedges:
Swap contracts	Prepaid expenses and other current assets	$	34.3	$	23.5
Swap contracts	Other assets	$	2.4	$	—
Swap contracts	Other current liabilities	$	—	$	—
Swap contracts	Other noncurrent liabilities	$	16.8	$	55.8

As of March 31, 2024, the estimated net amount of the existing gains expected to be reclassified into earnings within the next 12 months is approximately $34.3 million.

Net Investment Hedge

In February 2023, the Company entered into a cross-currency interest rate swap that was designated as a net investment hedge of our investments in euro-denominated operations. This contract effectively converted $500 million of U.S. dollar equivalent to an obligation denominated in euro, and partially offsets the impact of changes in currency rates on our euro-denominated net investments. This contract also created a positive interest differential on the U.S. dollar-denominated portion of the swap, resulting in a 1.96% interest rate savings on the USD notional. The Company terminated this net investment hedge on February 1, 2024, which resulted in net cash payments totaling $3.9 million. The loss on the net investment hedge will remain in accumulated other comprehensive loss and will only be reclassified into earnings if and when the underlying euro-denominated net investment is sold or liquidated.

In February 2024, we entered into four new cross-currency interest rate swaps that are designated as net investment hedges of our investments in euro-denominated operations. These contracts effectively convert an aggregate $500 million of U.S. dollar equivalent to an obligation denominated in euro, and partially offset the impact of changes in currency rates on our euro-denominated net investments. These contracts also create a positive interest differential on the U.S. dollar-denominated portion of the swap, resulting in a 1.55% interest rate savings on the USD notional.

Hedge effectiveness is tested based on changes in the fair value of the cross-currency swap due to changes in the USD/euro spot rate. The Company anticipates perfect effectiveness of the designated hedging relationship and records changes in the fair value of the cross-currency interest rate swap 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. The Company recognized a benefit of $2.0 million and $1.5 million in interest expense, net for the three months ended March 31, 2024 and 2023, respectively, related to these excluded components. Upon settlement, cash flows attributable to derivatives designated as net investment hedges will be classified as investing activities in the Unaudited Consolidated Statements of Cash Flows.

The following table presents the fair value of the Company’s cross-currency interest rate swaps designated as a net investment hedge, as well as their classification on the accompanying Consolidated Balance Sheets, as of March 31, 2024 and December 31, 2023 (in millions). 

		March 31, 2024		December 31, 2023
	Balance Sheet Classification	Fair Value
Cross-currency interest rate swaps designated as a net investment hedge:
Net investment hedge	Prepaid expenses and other current assets	$	7.9	$	—
Net investment hedge	Other current liabilities	$	—	$	14.5
Net investment hedge	Other noncurrent liabilities	$	9.5	$	—

22

14. Accumulated Other Comprehensive Loss (AOCL)

The changes in the components of AOCL, net of tax and noncontrolling interest, for the three months ended March 31, 2024 and 2023 are as follows (in thousands):