Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)			59
Consolidated Balance Sheets at December 31, 2023 and 2022			61
Consolidated Statements of Income for the Years Ended December 31, 2023, 2022 and 2021			62
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021			63
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023, 2022 and 2021			64
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021			65
Notes to Consolidated Financial Statements			66

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of FLEETCOR Technologies, Inc. and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of FLEETCOR Technologies, Inc. and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 29, 2024 expressed an adverse opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.


						Valuation of goodwill
Description of the Matter						At December 31, 2023, the Company’s goodwill was $5.6 billion. As discussed in Note 2 to the consolidated financial statements, the Company completes an impairment test of goodwill at the reporting unit level at least annually or more frequently if facts and circumstances indicate that goodwill might be impaired. For a reporting unit in which the Company concludes, based on a qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount (or if the Company elects to not perform the qualitative assessment), the Company performs a quantitative impairment test, which involves estimating the fair value of the reporting unit which is measured based upon, among other factors, a discounted cash flow analysis, as well as market multiples for comparable companies. Auditing the Company's estimate of reporting unit fair value involved a high degree of subjectivity as estimates underlying the determination of reporting unit fair value using the discounted cash flow model were based on significant assumptions that are sensitive to change and are affected by expected future market and economic conditions. These assumptions included forecasts for Revenue, net, Earnings before Interest Taxes Depreciation and Amortization (EBITDA), and long-term growth rates as well as the discount rates, which reflected risk-based factors based on the reporting units’ geographical location and business risk.


How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above. For example, we tested controls over management’s review of a quantitatively tested reporting units’ long-term growth rate and discount rate used in the determination of said reporting unit's estimated fair value. To test the estimated fair value of a quantitatively tested reporting unit, our audit procedures included, among others, assessing the methodologies used by the Company and testing the significant assumptions discussed above, inclusive of the underlying data used by the Company in its development of these assumptions. We involved our valuation specialists to assist us with these procedures. Our valuation specialists evaluated management’s estimation of the discount rate used in a reporting unit's fair value calculation, performed a comparison of market multiples to observable transactions, and independently recalculated the discount rate used. We also compared earnings forecasts to historical results, to current industry and economic trends, and performed sensitivity analyses of the significant assumptions to evaluate the changes in the fair value of a reporting unit that would result from changes in the significant assumptions.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2002.

Atlanta, Georgia

February 29, 2024

FLEETCOR Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Share and Par Value Amounts)


	December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	1,389,648	$	1,435,163
Restricted cash	1,751,887		854,017
Accounts and other receivables (less allowance for credit losses of $180,163 at December 31, 2023 and $149,846 at December 31, 2022)	2,161,586		2,064,745
Securitized accounts receivable—restricted for securitization investors	1,307,000		1,287,000
Prepaid expenses and other current assets	474,144		465,227

Total current assets	7,084,265		6,106,152


Property and equipment, net	343,154		294,692
Goodwill	5,644,958		5,201,435
Other intangibles, net	2,085,663		2,130,974
Investments	69,521		74,281
Other assets	248,691		281,726
Total assets	$	15,476,252	$	14,089,260
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,624,995	$	1,568,942
Accrued expenses	356,118		351,936
Customer deposits	2,397,279		1,505,004
Securitization facility	1,307,000		1,287,000
Current portion of notes payable and lines of credit	819,749		1,027,056
Other current liabilities	320,612		303,517
Total current liabilities	6,825,753		6,043,455
Notes payable and other obligations, less current portion	4,596,156		4,722,838
Deferred income taxes	470,232		527,465
Other noncurrent liabilities	301,752		254,009
Total noncurrent liabilities	5,368,140		5,504,312
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock, $0.001 par value; 475,000,000 shares authorized; 128,759,639 shares issued and 71,715,804 shares outstanding at December 31, 2023; and 127,802,590 shares issued and 73,356,709 shares outstanding at December 31, 2022	129		128
Additional paid-in capital	3,266,185		3,049,570
Retained earnings	8,192,659		7,210,769
Accumulated other comprehensive loss	(1,289,099)		(1,509,650)
Less treasury stock (57,043,835 shares and 54,445,881 shares at December 31, 2023 and 2022, respectively)	(6,887,515)		(6,209,324)
Total stockholders’ equity	3,282,359		2,541,493
Total liabilities and stockholders’ equity	$	15,476,252	$	14,089,260


See accompanying notes.

FLEETCOR Technologies, Inc. and Subsidiaries

Consolidated Statements of Income

(In Thousands, Except Per Share Amounts)


	Year Ended December 31,
	2023		2022		2021
Revenues, net	$	3,757,719	$	3,427,129	$	2,833,736
Expenses:

Processing	819,908		764,707		559,819
Selling	340,157		309,082		262,118
General and administrative	603,424		584,135		485,830
Depreciation and amortization	336,604		322,282		284,197
Other operating, net	753		282		(784)
Operating income	1,656,873		1,446,641		1,242,556
Investment (gain) loss, net	(116)		1,382		(9)
Other (income) expense, net	(16,623)		3,003		3,858
Interest expense, net	348,607		164,662		113,705
Loss on extinguishment of debt	—		1,934		16,194
Total other expense, net	331,868		170,981		133,748
Income before income taxes	1,325,005		1,275,660		1,108,808
Provision for income taxes	343,115		321,333		269,311
Net income	$	981,890	$	954,327	$	839,497
Earnings per share:
Basic earnings per share	$	13.42	$	12.62	$	10.23
Diluted earnings per share	$	13.20	$	12.42	$	9.99
Weighted average shares outstanding:
Basic shares	73,155		75,598		82,060
Diluted shares	74,387		76,862		84,061


See accompanying notes.

FLEETCOR Technologies, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(In Thousands)


	Year Ended December 31,
	2023		2022		2021
Net income	$	981,890	$	954,327	$	839,497
Other comprehensive income (loss):
Foreign currency translation gains (losses), net of tax	140,089		(77,135)		(144,543)
Reclassification of accumulated foreign currency translation losses to net income as a result of the sale of a foreign entity (see Note 19)	120,269		—		—
Net change in derivative contracts, net of tax	(39,807)		32,101		43,085
Total other comprehensive income (loss)	220,551		(45,034)		(101,458)
Total comprehensive income	$	1,202,441	$	909,293	$	738,039

See accompanying notes.

FLEETCOR Technologies, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(In Thousands)


	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total
Balance at December 31, 2020	$	126	$	2,749,900	$	5,416,945	$	(1,363,158)	$	(3,448,402)	$	3,355,411
Net income	—		—		839,497		—		—		839,497
Other comprehensive loss, net of tax	—		—		—		(101,458)		—		(101,458)
Acquisition of common stock	—		—		—		—		(1,355,722)		(1,355,722)
Stock-based compensation	—		80,071		—		—		—		80,071
Issuance of common stock	1		48,780		—		—		—		48,781
Balance at December 31, 2021	127		2,878,751		6,256,442		(1,464,616)		(4,804,124)		2,866,580
Net income	—		—		954,327		—		—		954,327


Other comprehensive loss, net of tax	—		—		—		(45,034)		—		(45,034)
Acquisition of common stock	—		—		—		—		(1,405,200)		(1,405,200)
Stock-based compensation	—		121,416		—		—		—		121,416
Issuance of common stock	1		49,403		—		—		—		49,404
Balance at December 31, 2022	128		3,049,570		7,210,769		(1,509,650)		(6,209,324)		2,541,493
Net income	—		—		981,890		—		—		981,890

Other comprehensive income, net of tax	—		—		—		220,551		—		220,551
Acquisition of common stock	—		(13,212)		—		—		(678,191)		(691,403)
Stock-based compensation	—		116,086		—		—		—		116,086
Issuance of common stock	1		113,741		—		—		—		113,742
Balance at December 31, 2023	$	129	$	3,266,185	$	8,192,659	$	(1,289,099)	$	(6,887,515)	$	3,282,359

See accompanying notes.

FLEETCOR Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In Thousands)


	Year Ended December 31,
	2023		2022		2021
Operating activities
Net income	$	981,890	$	954,327	$	839,497
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	109,983		92,010		75,571
Stock-based compensation	116,086		121,416		80,071
Provision for credit losses on accounts and other receivables	125,152		131,096		37,919
Amortization of deferred financing costs and discounts	7,249		7,748		6,831
Amortization of intangible assets and premium on receivables	226,621		230,272		208,625

Deferred income taxes	(46,678)		(33,174)		11,026
Loss on extinguishment of debt	—		1,934		16,194

Gain on sale of assets/business	(13,712)		—		—
Other non-cash operating expense (income), net	637		1,664		(793)
Changes in operating assets and liabilities (net of acquisitions/disposition):
Accounts receivable and other receivables	(210,261)		(598,674)		(731,137)
Prepaid expenses and other current assets	69,287		(17,543)		141,058
Derivative assets and liabilities, net	(33,278)		(11,260)		(15,360)
Other assets	54,180		(41,068)		47,055
Accounts payable, accrued expenses and customer deposits	713,976		(83,951)		480,506
Net cash provided by operating activities	2,101,132		754,797		1,197,063
Investing activities
Acquisitions, net of cash acquired	(428,327)		(216,917)		(602,120)
Purchases of property and equipment	(153,822)		(151,428)		(111,530)
Proceeds from disposal of a business, net of cash disposed	197,025		—		—

Other	4,401		—		(2,281)
Net cash used in investing activities	(380,723)		(368,345)		(715,931)
Financing activities

Proceeds from issuance of common stock	113,742		49,404		48,781
Repurchase of common stock	(686,859)		(1,405,200)		(1,355,722)
Borrowings on securitization facility, net	20,000		169,000		418,000
Deferred financing costs	(376)		(10,355)		(38,920)
Proceeds from notes payable	—		3,000,000		1,900,000
Principal payments on notes payable	(94,000)		(2,824,000)		(507,500)
Borrowings from revolver	8,734,960		7,236,000		1,910,000
Payments on revolver	(9,118,960)		(6,526,000)		(1,978,851)
Borrowings (payments) on swing line of credit, net	135,568		194		(51,049)

Other	(2,286)		(271)		(811)
Net cash (used in) provided by financing activities	(898,211)		(311,228)		343,928
Effect of foreign currency exchange rates on cash	30,157		(36,739)		(50,984)
Net increase in cash and cash equivalents and restricted cash	852,355		38,485		774,076
Cash and cash equivalents and restricted cash, beginning of year	2,289,180		2,250,695		1,476,619
Cash and cash equivalents and restricted cash, end of year	$	3,141,535	$	2,289,180	$	2,250,695
Supplemental cash flow information
Cash paid for interest	$	448,384	$	229,641	$	132,504
Cash paid for income taxes	$	408,340	$	358,231	$	229,721




See accompanying notes.

FLEETCOR Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2023

1. Description of Business

FLEETCOR is a global payments company that helps businesses and consumers better manager 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, FLEETCOR provides 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.

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 insights, which managers can use to better run their businesses. The Company's 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.

The Company has the following reportable segments: Vehicle Payments, Corporate Payments, Lodging Payments and Other. The Company reports these segments to reflect how we organize and manage our global employee base, manage operating performance, execute on strategic initiatives and contemplate the differing regulatory environments across geographies and solutions.

Our Vehicle Payments solutions are purpose-built to enable our business and consumer customers to pay for vehicle related expenses, while providing greater control and visibility of employee spending when compared with less specialized payment methods, such as cash or general-purpose credit cards. Our Vehicle Payments solutions include fuel, tolls and other complementary products. Our Corporate Payments solutions simplify and automate vendor payments and are designed to help businesses streamline the back-office operations associated with making outgoing payments. Companies save time, cut costs, and manage business-to-business (B2B) payment processing more efficiently with our suite of corporate payment solutions, including AP automation, virtual cards, cross-border, and purchasing and travel and entertainment cards. Our Lodging Payments solutions help businesses manage their travel-related lodging expenses while in the field, as well as lodging expenses of its customers, such as disrupted passengers in the airline industry. FLEETCOR provides other payments solutions, including gift and payroll card.

Our solutions provide customers with control capabilities including customizable user-level controls, programmable alerts, and detailed transaction reporting, among others. Our customers can use the data, controls and tools to combat employee misuse and fraud, streamline expense administration and potentially lower their operating costs.

We utilize both proprietary and third-party payment acceptance networks to deliver our solutions. In our proprietary networks, which tend to be geographically distinct, transactions are processed on applications and operating systems owned and operated by us, and only at select participating merchants with whom we have contracted directly for acceptance. Third-party networks are operated by independent parties, and tend to be more broadly accepted, which is the primary benefit compared with our proprietary networks. Mastercard and VISA are our primary third-party network partners in North America and Europe, respectively.

We actively market and sell our solutions to current and prospective customers leveraging a multi-channel approach. This go-to-market strategy includes comprehensive digital channels, direct sales forces and strategic partner relationships. We sell stand-alone products and services, and are currently organizing and establishing platforms where a single customer can use multiple products from one user interface. Our capabilities are also offered through indirect sales channels (e.g., such as major oil companies and retail establishments for certain of our products in Vehicle Payments) and on a branded or “white label” basis, indirectly through a broad range of resellers and partners across Vehicle Payments, Lodging Payments and Corporate Payments. In doing so, we leverage their sales networks to expand our reach into new customer segments, new industry verticals, and new geographies faster and at a significantly lower cost.

2. Basis of Presentation and Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (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. The accounting estimates used in the preparation of the Company’s 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 those estimates.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of FLEETCOR Technologies, Inc. and all of its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

The Company’s fiscal year ends on December 31. In certain of the Company’s U.K. businesses, the Company records the operating results using a 4-4-5 week accounting cycle with the fiscal year ending on the Friday on or immediately preceding December 31. Fiscal years 2023, 2022, and 2021 include 52 weeks for the businesses reporting using a 4-4-5 accounting cycle.

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. At December 31, 2023 and 2022, approximately 82% and 85%, respectively, of outstanding accounts receivable were less than 30 days past due. Accounts receivable deemed uncollectible are removed from accounts receivable and the allowance for credit losses when internal collection efforts have been exhausted and accounts have been turned over to a third-party collection agency. Recoveries from the third-party collection agency are not significant.

Business Combinations

Business combinations completed by us have been accounted for under the acquisition method of accounting, which requires that the acquired assets and liabilities, including contingencies, be recorded at fair value determined as of the acquisition date. The excess of the purchase price over the fair values of the tangible and intangible assets acquired and liabilities assumed represents goodwill. Amounts assigned to goodwill are primarily attributable to buyer-specific synergies expected to arise after the acquisition (e.g., enhanced reach of the combined organization and other synergies) and the assembled work force of the acquiree. The results of the acquired businesses are included in our results of operations beginning from the completion date of the transaction.

The estimates the Company uses to determine the fair value of long-lived assets, such as intangible assets, can be complex and require significant judgments. The Company uses information available to us to make fair value determinations and engages independent valuation specialists, when necessary, to assist in the fair value determination of significant acquired long-lived 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 represent 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 revenue growth rates, forecasted customer attrition rates, contract renewal estimates and technology changes. 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. Trademarks and trade names are generally valued using the "relief-from-royalty" approach. This method assumes that trademarks and trade names have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires the Company to estimate the future revenues for the related brands, the appropriate royalty rate and the weighted-average cost of capital. This measure of fair value requires considerable judgment about the value a market participant would be willing to pay in order to achieve the benefits associated with the trade name. Non-compete arrangements are measured at fair value separately from the business combination using a cash flow method based on the Company's best estimate of the probability of competition and its business effect absent the non-compete arrangement.

While the Company uses 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, the Company records 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. The Company also estimates 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. The Company periodically reviews the indefinite nature of these assets. The Company also periodically reviews the estimated useful lives assigned to our intangible assets to determine whether such estimated useful lives continue to be appropriate.

Impairment of Long-Lived Assets, Goodwill, Intangibles and Investments

The Company regularly evaluates whether events and circumstances have occurred that indicate the carrying amount of property and equipment and intangible assets with finite lives may not be recoverable. When factors indicate that these long-lived assets should be evaluated for possible impairment, the Company assesses the potential impairment by determining whether the carrying amount of such long-lived assets will be recovered through the future undiscounted cash flows expected from use of the asset and its eventual disposition. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market prices or discounted cash flow analyses as applicable. The Company regularly evaluates whether events and circumstances have occurred that indicate the useful lives of property and equipment and intangible assets with finite lives may warrant revision.

The Company completes 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. The Company first performs a qualitative assessment of certain of its 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 the Company elects to bypass the qualitative assessment or if it determines, 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. The Company then performs 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. Estimates critical to the Company’s evaluation of goodwill for impairment include the discount rates, forecasts for revenues, net and earnings before interest, taxes, depreciation and amortization (EBITDA) margin. If the carrying amount of the reporting unit is greater than its fair value, goodwill is considered impaired.

Based on the goodwill asset impairment analysis performed qualitatively and/or quantitatively as of October 1, 2023, the Company determined that the fair value of each of its reporting units was in excess of the carrying value. No events or changes in circumstances have occurred since the date of this most recent annual impairment test that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The Company evaluates indefinite-lived intangible assets (primarily trademarks and trade names) for impairment annually. The Company also tests for impairment more frequently 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. Estimates critical to the Company’s evaluation of indefinite-lived intangible assets for impairment include the discount rate, royalty rates used in its evaluation of trade names and projected revenue growth. An impairment loss is recognized if the carrying amount of an indefinite-lived intangible asset exceeds the estimated fair value on the measurement date. Based on the indefinite-lived intangible asset impairment analyses performed as of October 1, 2023, the Company determined the fair value of each of its indefinite-lived intangible assets was in excess of its carrying amount. No events or changes in circumstances have occurred since the date of this most recent annual impairment analysis that would more likely than not reduce the fair value of an indefinite-lived intangible asset below its carrying amount.

The Company has elected the alternative to measure certain investments in equity instruments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes for similar investments of the issuer. The Company reassesses these investments each reporting period to evaluate whether these investments continue to qualify for the alternative measurement at cost minus impairment, rather than requiring measurement at fair value on a recurring basis. The Company evaluates for impairment these equity investments without readily determinable fair values based on qualitative indicators (e.g., significant deterioration in investee's financial performance, adverse regulation, etc.). Investments classified as trading securities are carried at fair value with any unrealized gain or loss recorded within investment (gain) loss in the Consolidated Statements of Income. During 2021, the Company made an investment of $37.4 million in a 20-year joint venture with a third-party Brazilian bank. The Company determined that it exercises significant influence, but does not control, the joint venture and/or intermediary and records its allocable share of the joint ventures earnings/losses as an equity method investment under ASC 323. The Company monitors its equity method investments qualitatively for other than temporary impairment. The Company recorded no impairment charges on its investments for the years ended December 31, 2023, 2022, and 2021.

Property, Plant and Equipment and Definite-Lived Intangible Assets

Property, plant and equipment are stated at cost and depreciated on the straight-line basis. Intangible assets with finite lives, consisting primarily of customer relationships, are stated at fair value upon acquisition and are amortized over their estimated useful lives. Customer and merchant relationship useful lives are estimated using historical attrition rates.

The Company develops internal-use software that is used in providing processing and information management services to customers. A significant portion of the Company’s capital expenditures are devoted to the development of such internal-use computer software. Software development costs are capitalized once application development stage of the software has been established. Costs incurred during preliminary project stage prior to the application development stage are expensed as incurred. Application development stage is established when the Company has completed all planning, designing, coding and testing activities that are necessary to determine that the software can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the software is ready for its intended use. Software development costs are amortized using the straight-line method over the estimated useful life of the software. The Company capitalized software costs of $128.0 million, $120.5 million and $76.7 million in 2023, 2022 and 2021, respectively. Amortization expense for software totaled $77.5 million, $61.3 million and $46.7 million in 2023, 2022 and 2021, respectively.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. The Company has elected to treat the Global Intangible Low Taxed Income (GILTI) inclusion as a current period expense.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the associated temporary differences become deductible. The Company evaluates on a quarterly basis whether it is more likely than not that its deferred tax assets will be realized in the future and concludes whether a valuation allowance must be established.

The Company recognizes the impact of an uncertain income tax position on the income tax return at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company includes any estimated interest and penalties on tax related matters in income tax expense. See Note 13 for further information regarding income taxes.

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 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. During the third quarter of 2023, the Company disposed of its Russian net assets, including its cash balances. See Note 19 for additional information. Based on our assessment of the capital market conditions and related impact on our access to cash prior to the Russia disposition, we had classified all cash held at our Russia business of $215.8 million at December 31, 2022 to restricted cash.

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 and gains, which are recorded within other (income) expense, net in the Consolidated Statements of Income for the years ended December 31 as follows (in millions):


						2023						2022						2021
Foreign exchange losses						$	4.8					$	1.7					$	3.7

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


						2023						2022						2021
Foreign currency (gains) losses on long-term intra-entity transactions						$	(29.0)					$	205.7					$	44.4

Derivatives

The Company uses derivatives to minimize its exposures related to changes in interest rates and economic changes in the value of certain foreign-denominated net assets. The Company also uses derivatives to facilitate cross-currency corporate payments by writing derivatives to customers and enters into cross currency derivative contracts with banking partners to mitigate foreign exchange risk associated with customer derivative contracts.

The Company is exposed to the risk of changing interest rates because its borrowings are subject to variable interest rates. In order to mitigate this risk, the Company utilizes derivative instruments. Interest rate swap contracts designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company hedges interest payments on an unspecified portion of its variable rate debt utilizing derivatives designated as cash flow hedges.

Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded to the derivative assets/liabilities and offset against accumulated other comprehensive loss. Derivative fair value changes that are recorded in accumulated other comprehensive loss are reclassified to earnings in the same period or periods that the hedged item affects earnings, to the extent the derivative is highly effective in offsetting the change in cash flows attributable to the hedged risk.

In the Company's cross-border payments business, it writes foreign currency forwards, option contracts and swaps for its customers to facilitate future payments. The Company recognizes current cross-border payments derivatives in prepaid expenses and other current assets and recognizes other current liabilities and derivatives greater than one year in other assets and other noncurrent liabilities in the accompanying Consolidated Balance Sheets at their fair value. Any gains/losses associated with these derivatives are recorded through earnings.

The Company also utilizes cross-currency interest rate swaps designated as a net investment hedge of its investments in euro-denominated operations, which effectively converts a specified U.S. dollar notional equivalent to an obligation denominated in euro, and partially offsets the impact of changes in currency rates on the Company's euro-denominated net investments. Such contracts also create a positive interest differential on the U.S. dollar-denominated portion of the swap, resulting in interest rate savings on the USD notional.

All cash flows associated with the Company's foreign currency and interest rate swap derivatives are included in cash flows from operating activities in the Consolidated Statements of Cash Flows. Upon settlement of derivatives designated as a net investment hedges, the associated cash flows will be classified as investing activities in the Consolidated Statements of Cash Flows. Refer to Note 16.

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 offset 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 for the years ended December 31, 2023 and 2022 (in millions):


	December 31, 2023						December 31, 2022
	Gross		Offset on the Balance Sheet		Net		Gross		Offset on the Balance Sheet		Net
Assets
Accounts Receivable	$	2,499.9	$	(2,373.8)	$	126.1	$	2,409.8	$	(2,266.0)	$	143.8


Liabilities
Accounts Payable	$	2,457.3	$	(2,373.8)	$	83.5	$	2,332.5	$	(2,266.0)	$	66.5

Stock-Based Compensation

The Company routinely grants employee stock options and restricted stock awards/units as part of employee compensation plans. Stock options are granted with an exercise price equal to the fair market value of the underlying Company share on the date of grant. Options granted have vesting provisions ranging from one to five years, and vesting of the options is generally based on the passage of time, performance or market conditions, or a combination of these. Stock option grants are subject to forfeiture if employment terminates prior to vesting. The Company has selected the Black-Scholes option pricing model for estimating the grant date fair value of stock option awards. The Company has considered the retirement and forfeiture provisions of the options and utilized its historical experience to estimate the expected term of the options. Option forfeitures are accounted for upon occurrence. The Company bases the risk-free interest rate on the yield of a zero coupon U.S. Treasury security with a maturity equal to the expected term of the option from the date of the grant. Expected volatility is based on the Company's historical volatility.

Awards of restricted stock and restricted stock units are independent of stock option grants and are subject to forfeiture if employment terminates prior to vesting. The vesting of shares granted is generally based on the passage of time, performance or market conditions, or a combination of these. Shares generally have graded vesting provisions of one to four years. The fair value of restricted stock where the shares vest based on the passage of time or performance is based on the grant date fair value of the Company’s stock.

The fair value of stock options and restricted stock units granted with market-based vesting conditions is estimated using the Monte Carlo simulation valuation model. The risk-free interest rate and volatility assumptions used within the Monte Carlo simulation valuation model are calculated consistently with those applied in the Black-Scholes options pricing model utilized in determining the fair value of the market-based stock option awards.

For performance-based restricted stock awards/units and performance-based stock option awards, the Company must also make assumptions regarding the likelihood of achieving performance goals. If actual results differ significantly from these estimates, stock-based compensation expense and the Company’s results of operations could be materially affected.

Stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the requisite service period based on the number of years over which the requisite service is expected to be rendered.

Deferred Financing Costs/Debt Discounts

Costs incurred to obtain financing are amortized over the term of the related debt using the effective interest method and are included within interest expense, net. The Company capitalized additional debt issuance costs of $0.4 million associated with refinancing its Credit Facility and Securitization Facility in 2023 and $10.4 million in 2022. At December 31, 2023 and 2022, the Company had deferred financing costs of $5.7 million and $7.8 million, respectively, related to the revolver under the Credit Facility and the revolving Securitization Facility, each recorded within prepaid expenses and other current assets, on the Consolidated Balance Sheets. The Company had deferred financing costs and debt discounts of $19.0 million and $23.9 million at December 31, 2023 and 2022, respectively, related to the term notes under the Credit Facility, which were recorded as a discount to the term debt outstanding within the current portion of notes payable and lines of credit and within notes payable and other obligations, less current portion on the Consolidated Balance Sheets.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the total of net income and all other changes in equity that result from transactions and other economic events of a reporting period other than transactions with owners.

Accounts Receivable

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 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.

The Company’s accounts receivable and securitized accounts receivable include the following at December 31 (in thousands):


	2023		2022
Gross domestic unsecuritized accounts receivables	$	921,206	$	985,873
Gross domestic securitized accounts receivable	1,307,000		1,287,000
Gross foreign receivables	1,420,543		1,228,718
Total gross receivables	3,648,749		3,501,591
Less allowance for credit losses	(180,163)		(149,846)
Net accounts and securitized accounts receivable	$	3,468,586	$	3,351,745

A rollforward of the Company’s allowance for credit losses related to accounts receivable for the years ended December 31 is as follows (in thousands):


	2023		2022		2021
Allowance for credit losses beginning of year	$	149,846	$	98,719	$	86,886
Provision for credit losses	125,152		131,096		37,919
Write-offs	(115,631)		(90,540)		(35,868)
Recoveries	13,596		10,320		13,459
Impact of foreign currency	7,200		251		(3,677)

Allowance for credit losses end of year	$	180,163	$	149,846	$	98,719

The provision for credit losses and write-offs increased during the years ended December 31, 2023 and December 31, 2022 versus historical periods, as customer spend increased due to new sales and higher fuel prices for 2022 and into 2023. New customers tend to have higher loss rates. Additionally, the Company experienced higher losses among micro-SMB (small-medium business) customers who were more severely impacted by negative economic conditions.

Advertising

The Company expenses advertising costs as incurred. Advertising expense was $64.6 million, $65.5 million and $54.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Earnings Per Share

The Company reports basic and diluted earnings per share. Basic earnings per share is calculated using the weighted average of common stock and non-vested, non-forfeitable restricted shares outstanding, unadjusted for dilution, and net income attributable to common shareholders.

Diluted earnings per share is calculated using the weighted average shares outstanding and contingently issuable shares less weighted average shares recognized during the period. The net outstanding shares have been adjusted for the dilutive effect of common stock equivalents, which consist of outstanding stock options and unvested forfeitable restricted stock units.

Reclassifications and Adjustments

Certain disclosures for prior periods have been reclassified to conform with current year presentation, including the presentation of prior year segment disclosures to align with our current segment presentation.

Adoption of New Accounting Standards

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" (“ASU 2020-04”). The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The adoption of ASU 2020-04 did not have a material impact on the Company's consolidated financial statements. The Company transitioned from LIBOR to the Sterling Overnight Index Average Reference Rate (“SONIA”) plus a SONIA adjustment of 0.0326% for sterling borrowings, the Euro Interbank Offered Rate for euro borrowings, and the Tokyo Interbank Offer Rate for yen borrowings. In December 2022, the FASB issued ASU No. 2022-06, "Deferral of the Sunset Date of (Topic 848)" which defers the sunset date of ASC 848 until December 31, 2024. The ASU became effective upon issuance. The Company has availed itself to the practical expedients related to any changes in the reference rate related to our debt and interest rate swaps. Cross currency derivatives are not impacted by this ASU.

Debt with Conversion and Other Options and Derivatives and Hedging—Contracts in Entity’s Own Equity

In August 2020, the FASB issued ASU No. 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"), which address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. ASU 2020-06 also improve the guidance related to the disclosures and earnings per share for convertible instruments and contracts in entity's own equity. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company adopted this ASU on January 1, 2022. The adoption of ASU 2020-06 did not have a material impact on the Company's results of operations, financial condition, or cash flows.

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

In October 2021, the FASB issued ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805) ("ASU 2021-08"), which requires an acquirer to account for revenue contracts acquired in a business combination in accordance with Topic 606 as if it had originated the contracts. The acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired contracts. This update also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company adopted this ASU on January 1, 2023. The adoption of ASU 2021-08 did not have a material impact on the Company's results of operations, financial condition, or cash flows.

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" ("ASU 2023-07"). 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 adoption permitted. ASU 2023-09 should be applied on a prospective basis, while retrospective application is permitted. We are currently evaluating the impact that this guidance will have on the disclosures within our consolidated financial statements.

3. 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.

Payment Services

The Company’s primary performance obligation for the majority of its payment solutions (Vehicle Payments, Corporate Payments, Lodging Payments, and Other) is to stand-ready to provide authorization and processing services (payment services) for an unknown or unspecified quantity of transactions and the consideration received is contingent upon the customer’s use (e.g., number of transactions submitted and processed) of the related payment services. Accordingly, the total transaction price is variable. Payment services involve a series of distinct daily services that are substantially the same, with the same pattern of transfer to the customer. As a result, the Company directly allocates and recognizes variable consideration in the period it has the contractual right to invoice the customer. Similarly, for the toll product within Vehicle Payments, the Company's primary performance obligation is to stand-ready each month to provide access to the toll network and process toll transactions. Each period of access is determined to be distinct and substantially the same as the customer benefits over the period of access.

The Company records revenue for its payment services net of (i) the cost of the underlying products and services; (ii) assessments and other fees charged by the credit and debit payment networks (along with any rebates provided by them); (iii) customer rebates and other discounts; and (iv) taxes assessed (e.g. VAT and VAT-like taxes) by a government, imposed concurrent with a revenue-producing transaction. Variability arising from rebates is generally resolved and/or reset within the reporting period to which the variable consideration is allocated. As such, the Company is able to directly allocate net adjustments against revenue in the reporting period in which they are invoiced and does not materially constrain revenue recognition as a significant reversal of revenue is not probable at invoicing.

The majority of the transaction price the Company receives for fulfilling the Payment Services performance obligation are comprised of one or a combination of the following: 1) interchange fees earned from the payment networks; 2) discount fees earned from merchants; 3) fees calculated based on a number of transactions processed; 4) fees calculated based upon a percentage of the transaction value for the underlying goods or services (i.e. fuel, food, toll, lodging, and transportation cards and vouchers); and 5) monthly access fees.

The Company recognizes revenue when the underlying transactions are complete and as its performance obligations are satisfied. Transactions are considered complete depending upon the related payment solution but generally when the Company has authorized the transaction, validated that the transaction has no errors and accepted and posted the data to the Company’s records.

In the Company's cross-border payments business, a portion of revenue is from exchanges of currency at spot rates, which enables customers to make cross-currency payments. The Company's performance obligation for its foreign exchange payment services is providing a foreign currency payment to a customer’s designated recipient and therefore, the Company recognizes 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 set by the Company to the customer and the rate available in the wholesale foreign exchange market.

Gift Card Products and Services

The Company’s Gift solutions deliver both stored value cards and e-cards (cards), and card-based services primarily in the form of gift cards to retailers. These activities each represent performance obligations that are separate and distinct. Revenue for stored value cards is recognized (gross of the underlying cost of the related card, recorded in processing expenses within the

Consolidated Statements of Income) at the point in time when control passes to the Company's customer, which is generally upon shipment.

Card-based services consist of transaction processing and reporting of gift card transactions where the Company recognizes revenue based on the passage of time as it stands ready to process an unknown or unspecified quantity of transactions. As a result, the Company directly allocates and recognizes variable consideration over the estimated period of time over which the performance obligation is satisfied.

Other

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 5% of total consolidated revenues, net for the years ended December 31, 2023 and 2022. The Company ceases billing and accruing for late fees and finance charges approximately 30 - 40 days after the customer’s balance becomes delinquent.

In addition, in its cross-border payments business, the Company writes foreign currency forwards, option contracts and swaps for its customers primarily to facilitate future payments in foreign currencies. The duration of these derivative contracts at inception is generally less than one year. The Company aggregates its foreign exchange exposures arising from customer contracts, including forwards, options and spot exchanges of currency, as necessary, and economically hedges the net currency risks by entering into offsetting derivatives with established financial institution counterparties. The Company accounts for the derivatives in its cross-border payments business in accordance with ASC 815, "Derivatives and Hedging." Revenues earned on the currency spread inherent in the instruments on date of execution, as well as changes in fair value related to these instruments prior to settlement, represented approximately 8% of consolidated revenues, net, for the years ended December 31, 2023 and 2022.

Revenue is also derived from the sale of equipment and cards in certain of the Company’s businesses, which is recognized at the time the device or card is sold and control has passed to the customer. This revenue is recognized gross of the cost of sales related to the equipment and cards in revenues, net within the Consolidated Statements of Income. The Company has recorded $76.3 million, $83.1 million and $76.6 million of expenses related to sales of equipment and cards in processing expenses within the Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021, respectively.

Revenues from contracts with customers, within the scope of Topic 606, represent approximately 85% and 87% of consolidated revenues, net, for the years ended December 31, 2023 and 2022, respectively.

The Company's remaining revenue primarily represents float revenue earned on invested customer funds in jurisdictions where permitted. Such revenue represented approximately 2% of consolidated revenues, net for the year ended December 31, 2023 and was not significant for the years ended December 31, 2022 or 2021.

Disaggregation of Revenues

The Company provides its services to customers across different payment solutions and geographies. Revenues, net by solution for the years ended December 31 (in millions) are as follows:


Revenues by Segment	2023		2022		2021
Vehicle Payments	$	2,005.5	$	1,950.0	$	1,690.0
Corporate Payments	981.1		769.6		598.2
Lodging Payments	520.2		456.5		309.6
Other	250.9		251.0		235.9
Consolidated revenues, net	$	3,757.7	$	3,427.1	$	2,833.7

Revenues, net by geography for the years ended December 31 (in millions) are as follows:


Revenues by Geography	2023		2022		2021
United States (country of domicile)	$	2,134.7	$	2,093.9	$	1,785.2
Brazil	525.1		442.2		368.1
United Kingdom	441.4		363.3		321.8
Other	656.5		527.7		358.6
Consolidated revenues, net	$	3,757.7	$	3,427.1	$	2,833.7

Contract Liabilities

Deferred revenue contract liabilities for customers subject to ASC 606 were $45.7 million and $57.7 million as of December 31, 2023 and 2022, respectively. We expect to recognize approximately $31.9 million of these amounts in revenues within 12 months and the remaining $13.8 million over the next five years as of December 31, 2023. The amount and timing of revenue recognition is affected by several factors, including contract modifications and terminations, which could impact the estimate of amounts allocated to remaining performance obligations and when such revenues could be recognized. Revenue recognized for the year ended December 31, 2023, that was included in the deferred revenue contract liability as of January 1, 2023, was approximately $36.4 million.

Costs to Obtain or Fulfill a Contract and/or Customer Incentives

In accordance with ASC 606, the Company capitalizes the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, a sales commission).

Costs incurred to fulfill a contract are capitalized if those costs meet all of the following criteria:

a.The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify.

b.The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future.

c.The costs are expected to be recovered.

In order to determine the appropriate amortization period for contract costs, the Company considers a combination of factors, including customer attrition rates, estimated terms of customer relationships, the useful lives of technology used by the Company to provide products and services to its customers, whether further contract renewals are expected and if there is any incremental commission to be paid on a contract renewal. Contract acquisition and fulfillment costs are amortized using the straight-line method over the expected period of benefit (ranging from five to ten years). Costs to obtain a contract with an expected period of benefit of one year or less are recognized as an expense when incurred. The amortization of contract acquisition costs associated with sales commissions that qualify for capitalization is recorded as selling expense in the Company’s Consolidated Statements of Income.

Amortization of capitalized contract costs recorded in selling expense was $16.7 million, $15.4 million and $16.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Costs to obtain or fulfill a contract are classified as contract cost assets within prepaid expenses and other current assets and other assets in the Company’s Consolidated Balance Sheets. The Company had capitalized contract costs of $19.2 million and $17.1 million within prepaid expenses and other current assets and $44.9 million and $42.9 million within other assets in the Company’s Consolidated Balance Sheets, as of December 31, 2023 and 2022, respectively.

Further, the Company on occasion may make a cash payment to a customer as a contract incentive. We defer these costs as payments to a customer if recoverable and amortize them over the benefit period, including anticipated customer renewals. The amortization of costs associated with cash payments for client incentives is included as a reduction of revenues in the Company’s Consolidated Statements of Income. The Company had deferred customer incentives of $10.0 million and $9.5 million as of December 31, 2023 and 2022, respectively. Amortization of deferred customer incentives was immaterial for the years ended December 31, 2023, 2022 and 2021.

Practical Expedients

ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as allowed by ASC 606, the Company elected to exclude this disclosure for contracts with performance obligations of one year or less and contracts with variable consideration that is directly allocated to a single performance obligation such as a stand-ready series. As described above, the Company's most significant single performance obligations consist of variable consideration directly allocated under a stand-ready series of distinct days of service. Such direct allocation of variable consideration meets the specified criteria for the disclosure exclusion; therefore, the majority of the aggregate amount of transaction price that is allocated to unsatisfied performance obligations is variable consideration that is not required for this disclosure. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material.

The Company elected to exclude all sales taxes and other similar taxes from the transaction price. Accordingly, the Company presents all collections from customers for these taxes on a net basis, rather than having to assess whether the Company is acting as an agent or a principal in each taxing jurisdiction.

In certain arrangements with customers, the Company has determined that certain promised services and products are immaterial in the context of the contract, both quantitatively and qualitatively.

As a practical expedient, the Company is not required to adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised service or product to a customer and when the customer pays for the service or product will be one year or less. As of December 31, 2023, the Company’s contracts with customers contain standard pricing where the timing on control transfer is dependent upon the customer in a stand-ready environment and therefore did not contain a significant financing component.

4. Fair Value Measurements

Fair value is a market-based measurement that reflects assumptions that market participants would use in pricing an asset or liability. GAAP discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions.

As the basis for evaluating such inputs, 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 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 fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The following table presents the Company’s financial assets and liabilities which are measured at fair values on a recurring basis as of December 31, 2023 and 2022, (in thousands):


	Fair Value		Level 1		Level 2		Level 3
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	$	—	$	—	$	—

December 31, 2022
Assets:
Overnight deposits	$	444,216	$	—	$	444,216	$	—
Money market	37,821		—		37,821		—
Certificates of deposit	181		—		181		—
Interest rate swaps	11,953		—		11,953		—
Foreign exchange contracts	266,917		—		266,917		—
Total assets	$	761,088	$	—	$	761,088	$	—
Cash collateral for foreign exchange contracts	$	56,103	$	—	$	—	$	—
Liabilities:

Foreign exchange contracts	224,725		—		224,725		—
Total liabilities	$	224,725	$	—	$	224,725	$	—
Cash collateral obligation for foreign exchange contracts	$	148,167	$	—	$	—	$	—

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. Interest rate swap derivative contracts are carried at fair value, with changes in fair value recognized in accumulated other comprehensive loss to the extent designated as highly effective cash flow hedges for accounting purposes.

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 in our Consolidated Balance Sheets. Cash collateral deposited for foreign exchange derivatives is recorded within restricted cash in our Consolidated Balance Sheets.

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 2023 and 2022.

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 16 for additional information on the fair value of the Company’s derivatives.

The Company regularly evaluates the carrying value of its investments. The carrying value of investments without readily determinable fair values was $69.5 million and $74.3 million at December 31, 2023 and 2022, 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.

5. 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. Since the beginning of the Program through December 31, 2023, 28,878,862 shares have been repurchased for an aggregate purchase price of $6.5 billion, leaving the Company up to $1.6 billion of remaining authorization available under the Program for future repurchases in shares of its common stock. There were 2,597,954 common shares totaling $687 million in 2023; 6,212,410 common shares totaling $1.4 billion in 2022 and 5,451,556 common shares totaling $1.4 billion in 2021; repurchased under the Program. Repurchased shares are held as treasury stock on the Company's Consolidated Balance Sheets.

On August 18, 2023, as part of the Program, the Company entered an accelerated share repurchase ("ASR") agreement ("2023 ASR Agreement") with a third-party financial institution to repurchase $450 million of its common stock. Pursuant to the 2023 ASR Agreement, the Company delivered $450 million in cash and received 1,372,841 shares based on a stock price of $262.23 on August 18, 2023. The 2023 ASR Agreement was completed on September 26, 2023, at which time the Company received 293,588 additional shares based on a final weighted average per share purchase price during the repurchase period of $270.04.

The Company accounted for the 2023 ASR Agreement as two separate transactions: (i) as shares of reacquired common stock for the shares delivered to the Company upon execution of the ASR Agreement and (ii) as a forward contract indexed to the Company's common stock for the undelivered shares. The initial delivery of shares was included in treasury stock at cost and resulted in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share. The forward contracts indexed to the Company's own common stock met the criteria for equity classification, and these amounts were initially recorded in additional paid-in capital and reclassified to treasury stock upon settlement based on the final weighted average per share price.

6. Stock-Based Compensation

The Company accounts for stock-based compensation pursuant to relevant authoritative guidance, which requires measurement of compensation cost for all stock awards at fair value on the date of grant and recognition of compensation, net of estimated forfeitures, over the requisite service period for awards expected to vest.

The Company has a Stock Incentive Plan (the "Plan"), pursuant to which the Company's board of directors is permitted to grant equity to employees and directors. Under the Plan, a maximum of 20.65 million shares of our common stock is approved to be issued for grants of restricted stock and stock options. At December 31, 2023, there were 3.9 million shares available to be granted under the Plan. The Company does not issue shares from treasury stock under the Plan.

The table below summarizes the expense recognized within general and administrative expenses in the Consolidated Statements of Income related to stock-based compensation for the years ended December 31 (in thousands):


	2023		2022		2021
Stock options	$	24,342	$	61,993	$	30,057
Restricted stock	91,744		59,423		50,014
Stock-based compensation	$	116,086	$	121,416	$	80,071

The tax benefits recorded upon the exercises of options and vesting of restricted stock were $22.1 million, $25.5 million and $32.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The following table summarizes the Company’s total unrecognized compensation cost related to outstanding stock awards as of December 31, 2023 (cost in thousands):


	Unrecognized Compensation Cost		Weighted Average Period of Expense Recognition Remaining (in Years)
Stock options	$	70,627	2.19
Restricted stock	40,695		0.50
Total	$	111,322

Stock Options

The following summarizes the changes in the number of shares of stock options outstanding for the following periods (shares and aggregate intrinsic value in thousands):


	Shares	Weighted Average Exercise Price		Options Exercisable at End of Year	Weighted Average Exercise Price of Exercisable Options		Weighted Average Fair Value of Options Granted During the Year		Aggregate Intrinsic Value
Outstanding at December 31, 2020	4,964	$	146.69	3,994	$	130.37			$	626,107
Granted	1,097	261.85					$	72.84
Exercised	(592)	82.50							83,686
Forfeited	(22)	230.14
Outstanding at December 31, 2021	5,447	176.52		3,798	145.18				257,707
Granted	649	223.66					$	65.23
Exercised	(544)	94.79							64,783
Forfeited	(251)	230.60
Outstanding at December 31, 2022	5,301	188.12		3,512	159.46				113,681
Granted	411	222.51					$	66.28
Exercised	(648)	172.01							40,983
Forfeited	(81)	241.78
Outstanding at December 31, 2023	4,983	$	192.18	3,182	$	163.54			$	451,039
Expected to vest at December 31, 2023	952	$	226.20

The following table summarizes information about stock options outstanding at December 31, 2023 (shares in thousands):


Exercise Price	Options Outstanding	Weighted Average Remaining Vesting Life in Years	Options Exercisable
$106.83 – $199.75	2,670	0.02	2,615
$200.41 – $216.18	251	1.12	58
$220.13 – $231.70	582	0.63	219
$235.52 – $251.88	265	2.49	15
$252.50 – $261.27	1,151	0.04	234
$263.21 – $286.86	45	0.47	23
$288.37 – $319.55	19	0.01	17
	4,983		3,182

The aggregate intrinsic value of stock options exercisable at December 31, 2023 was $379.1 million. The weighted average remaining contractual term of options exercisable at December 31, 2023 was 3.0 years.

The fair value of stock option awards granted was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions for grants or modifications during the years ended December 31 as follows:


	2023		2022		2021
Risk-free interest rate	4.39	%	1.65	%	0.45	%
Dividend yield	—		—		—
Expected volatility	33.73	%	34.62	%	34.44	%
Expected term (in years)	3.4		3.9		4.0

The weighted-average remaining contractual term for options outstanding was 3.7 years at December 31, 2023.

The fair value of stock options granted with market based vesting conditions was estimated using the Monte Carlo simulation valuation model with the following assumptions during the year ended December 31, 2021 as follows. There were no performance options granted with market based vesting conditions in 2023 or 2022.


	2021
Risk-free interest rate	0.59	%
Dividend yield	—
Expected volatility	36.10	%
Expected term (in years)	3.3

Restricted Stock

The following table summarizes the changes in the number of shares of restricted stock awards and restricted stock units outstanding for the following periods (shares in thousands):


	Shares	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2020	174	$	265.29
Granted	215	272.59
Cancelled	(38)	265.76
Issued	(73)	258.13
Outstanding at December 31, 2021	278	278.57
Granted	386	229.22
Cancelled	(83)	267.53
Issued	(146)	283.60
Outstanding at December 31, 2022	435	237.68
Granted	441	213.36
Cancelled	(24)	230.11
Issued	(310)	235.25
Outstanding at December 31, 2023	542	$	219.61

The total fair value of restricted stock awards and restricted stock units vested was $66.6 million, $34.4 million and $20.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.

7. Acquisitions and Equity Method Investments

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 the 2023 acquisitions as the Company is still completing the valuation for goodwill, intangible assets, income taxes, working capital, and contingencies.

The following table summarizes the preliminary acquisition accounting, in aggregate, for the 2023 business acquisitions noted above (in thousands):


Trade and other receivables	$	6,004
Prepaid expenses and other current assets	46,472
Other long term assets	13,302
Goodwill	382,793
Intangibles	158,689
Accounts payable	(23,789)
Other current liabilities	(129,603)
Other noncurrent liabilities	(18,923)

Aggregate purchase price	$	434,945

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.

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

2022 Acquisitions

In March 2022, the Company completed the acquisition of Levarti, a U.S.-based airline software platform company reported in the Lodging Payments segment, for $23.7 million, net of cash. In August 2022, the Company completed the acquisition of Accrualify, an accounts payable (AP) automation software company reported in the Corporate Payments segment, for $41.2 million, net of cash. In September 2022, the Company completed the acquisition of Plugsurfing, a European EV software and network provider reported in the Vehicle Payments segment, for $75.8 million, net of cash. In November 2022, the Company completed the acquisition of Roomex, a European workforce lodging provider serving the U.K. and German markets reported in the Lodging Payments segment, for approximately $56.8 million, net of cash. 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 2022 acquisitions was approximately $197.2 million, net of cash. The Company financed the acquisitions using a combination of available cash and borrowings under its existing credit facility. In connection with two of these acquisitions, the Company signed noncompete agreements of $1.1 million and $1.2 million with certain parties affiliated with the respective businesses. These noncompete agreements were accounted for separately from the business acquisitions.

The following table summarizes the final acquisition accounting, in aggregate, for the 2022 business acquisitions noted above (in thousands):


Trade and other receivables	$	13,349
Prepaid expenses and other current assets	4,006
Other long term assets	468
Goodwill	163,938
Intangibles	50,145
Accounts payable	(20,542)
Other current liabilities	(4,960)
Other noncurrent liabilities	(9,191)

Aggregate purchase price	$	197,213

The 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	$	4,705
Proprietary Technology	5 to 10	11,646
Lodging / Supplier Network	10 to 20	1,402
Customer Relationships	5 to 20	32,392



		$	50,145

Other

In February 2022, the Company also made investments of $7.8 million in an EV charging payments business and $5.0 million in an EV data analytics business. In September 2022, the Company made an investment of $6.1 million in a U.K.-based EV search and pay mapping service.

8. Goodwill and Other Intangible Assets

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


	December 31, 2022		Acquisitions1		Dispositions2		Acquisition Accounting Adjustments		Foreign Currency		December 31, 2023
Segment
Vehicle Payments	$	2,530,391	$	233,240	$	(40,857)	$	4,389	$	76,827	$	2,803,990
Corporate Payments	1,906,070		149,553		—		(105)		19,218		2,074,736
Lodging Payments	416,044		—		—		(764)		1,672		416,952
Other	348,930		—		—		—		350		349,280
	$	5,201,435	$	382,793	$	(40,857)	$	3,520	$	98,067	$	5,644,958

1Reflects the recognition of preliminary goodwill related to acquisitions completed by the Company during the year ended December 31, 2023.
2Reflects goodwill derecognized in connection with the disposition of the Company's operations in Russia. See Note 19 for additional information.


	December 31, 2021		Acquisitions		Acquisition Accounting Adjustments		Foreign Currency		December 31, 2022
Segment
Vehicle Payments	$	2,475,243	$	71,856	$	1,216	$	(17,924)	$	2,530,391
Corporate Payments	1,888,875		40,387		2,933		(26,125)		1,906,070
Lodging Payments	364,653		46,928		4,700		(237)		416,044
Other	350,207		—		—		(1,277)		348,930
	$	5,078,978	$	159,171	$	8,849	$	(45,563)	$	5,201,435

At December 31, 2023 and 2022, approximately $985.9 million and $945.0 million of the Company’s goodwill is deductible for tax purposes, respectively. Acquisition accounting adjustments recorded in 2023 and 2022 are a result of the Company completing its acquisition accounting and working capital adjustments for certain prior year acquisitions.

Other intangible assets consisted of the following at December 31 (in thousands):


		2023						2022
	Weighted- Avg Useful Life (Years)	Gross Carrying Amounts		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amounts		Accumulated Amortization		Net Carrying Amount
Customer and vendor relationships	16.6	$	3,044,522	$	(1,511,173)	$	1,533,349	$	2,922,586	$	(1,332,542)	$	1,590,044
Trade names and trademarks—indefinite lived	N/A	440,900		—		440,900		419,270		—		419,270
Trade names and trademarks—other	2.0	51,510		(15,334)		36,176		47,939		(9,111)		38,828
Technology	6.0	299,780		(238,819)		60,961		278,460		(216,858)		61,602
Non-compete agreements	4.2	85,111		(70,834)		14,277		80,098		(58,868)		21,230

Total other intangibles		$	3,921,823	$	(1,836,160)	$	2,085,663	$	3,748,353	$	(1,617,379)	$	2,130,974
N/A = Not Applicable

Changes in foreign exchange rates resulted in $32.4 million and $18.4 million decreases to the carrying values of other intangible assets in the years ended December 31, 2023 and 2022, respectively. Amortization expense related to intangible assets for the years ended December 31, 2023, 2022, and 2021 was $225.4 million, $227.2 million, and $205.5 million, respectively. Due to rebranding activity during the year ended December 31, 2022, the Company reassessed the useful lives of certain trademarks. This resulted in a reclassification of $45.6 million from indefinite to finite-lived assets as of December 31, 2022. At the time of change in estimate, which was applied prospectively, the Company tested these trademarks for impairment, which resulted in no impairment charge.

The future estimated amortization of intangible assets at December 31, 2023 is as follows (in thousands):


2024	$	216,912
2025	194,511
2026	172,952
2027	165,531
2028	162,267
Thereafter	732,590

9. Property, Plant and Equipment

Property, plant and equipment, net consisted of the following at December 31 (in thousands):


	Estimated Useful Lives (in Years)	2023		2022
Computer hardware and software	3 to 5	$	734,759	$	581,471
Card-reading equipment	4 to 6	61,216		49,351
Furniture, fixtures, and vehicles	2 to 10	20,614		19,482
Buildings and improvements	5 to 50	41,508		35,817
Property, plant and equipment, gross		858,097		686,121
Less: accumulated depreciation		(514,943)		(391,429)
Property, plant and equipment, net		$	343,154	$	294,692

Depreciation expense related to property and equipment for the years ended December 31, 2023, 2022, and 2021 was $110.0 million, $92.0 million, and $75.6 million, respectively. Amortization expense includes $77.5 million, $61.3 million, and $46.7 million for capitalized computer software costs for the years ended December 31, 2023, 2022, and 2021, respectively. At December 31, 2023 and 2022, the Company had unamortized computer software costs of $268.9 million and $213.3 million, respectively.

Write-offs of property, plant and equipment were immaterial for each of the years ended December 31, 2023, 2022, and 2021.

10. Accrued Expenses

Accrued expenses consisted of the following at December 31 (in thousands):


	2023		2022
Accrued bonuses	$	12,696	$	19,975
Accrued payroll and severance	53,303		48,007
Accrued taxes	109,323		94,557
Accrued commissions/rebates	74,519		83,190
Other1	106,277		106,207


	$	356,118	$	351,936

1Other accrued expenses include several types of amounts due to our merchants, vendors, and other third parties.

11. Debt

The Company’s debt instruments at December 31 consist primarily of term notes, revolving lines of credit and a Securitization Facility as follows (in thousands):


	2023		2022
Term Loan A note payable (a), net of discounts	$	2,882,595	$	2,956,053
Term Loan B note payable (a), net of discounts	1,840,244		1,855,891
Revolving line of credit facilities (a)	692,318		935,000
Other obligations (c)	748		2,950



Total notes payable, credit agreements, and other obligations	5,415,905		5,749,894
Securitization Facility (b)	1,307,000		1,287,000
Total debt	$	6,722,905	$	7,036,894
Current portion	$	2,126,749	$	2,314,056
Long-term portion	4,596,156		4,722,838
Total debt	$	6,722,905	$	7,036,894

(a)The Company is party to a $6.4 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 $1.5 billion, a term loan A facility in the amount of $3.0 billion and a term loan B facility in the amount of $1.9 billion as of December 31, 2023. The revolving credit facility consists of (a) a revolving A credit facility in the amount of $1 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.

On June 24, 2022, the Company entered into the twelfth amendment to the Credit Agreement. The amendment replaced the then-existing term loan A with the $3 billion term loan A described above and the then-existing revolving credit facility with the $1.5 billion revolving credit facility described above, resulting in net increases of $273 million and $215 million to the capacities of the term loan A and revolving credit facility, respectively. In addition, the amendment replaced LIBOR for USD borrowings with the Secured Overnight Financing Rate ("SOFR") plus a SOFR adjustment of 0.10% for the term loan A and the revolving Credit Facility and extended the maturity date. The maturity date for the new 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 B loan with the Secured Overnight Financing Rate ("SOFR"), plus a SOFR adjustment of 0.10%.

On January 31, 2024, the Company entered into the fourteenth amendment to its 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. The Company 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 the Company’s availability under the revolving credit facility. The interest rates and maturity terms remain consistent with the existing credit facilities.

Interest on amounts outstanding under the Credit Agreement accrues as follows: For loans denominated in U.S. dollars, based on SOFR plus a SOFR adjustment of 0.10%, in British pounds, based on the SONIA plus a SONIA adjustment of 0.0326%, in euros, based on the Euro Interbank Offered Rate (“EURIBOR”), or in Japanese yen, at the Tokyo 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, the Company pays 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.

The interest rates at December 31, 2023 and 2022 are as follows:


	2023		2022
Term loan A	6.83	%	5.80	%
Term loan B	7.21	%	6.13	%
Revolving line of credit A & B (USD)	6.83	%	5.79	%
Revolving line of credit B (GBP)	6.59	%	N/A
Unused credit facility fee	0.25	%	0.25	%
N/A = Not Applicable

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 line of credit are due no later than twenty business days after such loan is made.

The Company has unamortized debt discounts and debt issuance costs of $19.0 million and $23.9 million related to the term loans as of December 31, 2023 and December 31, 2022, respectively, recorded in notes payable and other obligations, net of current portion within the Consolidated Balance Sheets.

The Company has unamortized debt issuance costs of $3.6 million and $4.6 million related to the revolving credit facility as of December 31, 2023 and December 31, 2022, respectively, recorded in other assets 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 6.83% during 2023. Principal payments of $94.0 million were made on the term loans during 2023.

(b)The Company is party to a $1.7 billion receivables purchase agreement. On March 23, 2022, the Company entered into the tenth amendment to the Securitization Facility. The amendment increased the Securitization Facility commitment from $1.3 billion to $1.6 billion and replaced LIBOR with SOFR plus a SOFR adjustment of 0.10%. On August 18, 2022, the Company entered into the eleventh amendment to the Securitization Facility. The amendment increased the Securitization Facility commitment from $1.6 billion to $1.7 billion, reduced the program fee margin and extended the maturity of the Securitization Facility to August 18, 2025. There is a program fee equal to SOFR plus 0.10% adjustment plus 0.95% or the Commercial Paper Rate plus 0.85% as of December 31, 2023 and December 31, 2022. The program fee was 5.49% plus 0.94% as of December 31, 2023 and 4.48% plus 0.94% as of December 31, 2022. The unused facility fee is payable at a rate of between 0.30% and 0.40% based on utilization as of December 31, 2023 and December 31, 2022. The Company has unamortized debt issuance costs of $2.1 million and $3.2 million related to the revolving Securitization Facility as of December 31, 2023 and December 31, 2022, respectively, recorded in other assets within the Consolidated Balance Sheets.

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.

(c)Other obligations includes a credit facility assumed as part of a business acquisition in 2022.

The Company was in compliance with all financial and non-financial covenants at December 31, 2023. The Company has entered into interest rate swap cash flow contracts with U.S. dollar notional amounts in order to reduce the variability of cash flows in the previously unhedged interest payments associated with $4.0 billion of unspecified variable rate debt. Refer to Note 16 for further details.

The contractual maturities of the Company’s total debt at December 31, 2023 were as follows (in thousands):


2024	$	824,648
2025	169,000
2026	169,000
2027	2,494,000
2028	1,778,375
Thereafter	—
Total principal payments	5,435,023
Less: debt discounts and issuance costs included in debt	(19,118)
Total debt	$	5,415,905

12. Accumulated Other Comprehensive Loss (AOCL)

The changes in the components of AOCL, net of tax, for the years ended December 31, 2023, 2022 and 2021 are as follows (in thousands):


	Cumulative Foreign Currency Translation		Unrealized (Losses) Gains on Derivative Instruments		Total Accumulated Other Comprehensive (Loss) Income

Balance at December 31, 2020	$	(1,296,962)	$	(66,196)	$	(1,363,158)
Other comprehensive (loss) income before reclassifications	(144,543)		7,394		(137,149)
Amounts reclassified from AOCL	—		49,747		49,747
Tax effect	—		(14,056)		(14,056)
Other comprehensive (loss) income, net of tax	(144,543)		43,085		(101,458)
Balance at December 31, 2021	(1,441,505)		(23,111)		(1,464,616)
Other comprehensive (loss) income before reclassifications	(77,135)		31,853		(45,282)
Amounts reclassified from AOCL	—		10,835		10,835
Tax effect	—		(10,587)		(10,587)
Other comprehensive (loss) income, net of tax	(77,135)		32,101		(45,034)
Balance at December 31, 2022	(1,518,640)		8,990		(1,509,650)
Other comprehensive income (loss) before reclassifications	140,089		(14,984)		125,105
Amounts reclassified from AOCL	120,269		(39,401)		80,868
Tax effect	—		14,578		14,578
Other comprehensive income (loss), net of tax	260,358		(39,807)		220,551
Balance at December 31, 2023	$	(1,258,282)	$	(30,817)	$	(1,289,099)

Amounts reclassified from AOCL that relate to foreign currency translation during the year ended December 31, 2023 are related to the Company's Russia business disposed of during the third quarter of 2023. See Note 19 for additional information regarding the Company's disposition of its Russia business.

13. Income Taxes

Income before the provision for income taxes is attributable to the following jurisdictions for years ended December 31 (in thousands):


	2023		2022		2021
United States	$	322,856	$	506,214	$	515,041
Foreign	1,002,149		769,446		593,767
Total	$	1,325,005	$	1,275,660	$	1,108,808

The provision (benefit) for income taxes for the years ended December 31 consists of the following (in thousands):


	2023		2022		2021
Current:
Federal	$	155,647	$	166,172	$	118,861
State	25,614		34,947		31,674
Foreign	208,532		153,388		107,751
Total current	389,793		354,507		258,286
Deferred:
Federal	(46,676)		(36,613)		(12,165)
State	(8,088)		(6,066)		(4,540)
Foreign	8,086		9,505		27,730
Total deferred	(46,678)		(33,174)		11,025
Total provision	$	343,115	$	321,333	$	269,311

The provision for income taxes differs from amounts computed by applying the U.S. federal tax rate of 21% for 2023, 2022, and 2021, respectively, to income before income taxes for the years ended December 31, 2023, 2022, and 2021 due to the following (in thousands):


	2023				2022				2021
Computed “expected” tax expense	$	278,251	21.0	%	$	267,889	21.0	%	$	232,850	21.0	%
Changes resulting from:
Change in valuation allowance	22,447		1.7		22,399		1.8		1,378		0.1
Foreign income tax differential	14,949		1.1		566		—		(10,326)		(0.9)
State taxes net of federal benefits	13,857		1.0		12,745		1.0		18,352		1.7
Increase in tax expense due to uncertain tax positions	14,146		1.1		8,257		0.6		8,185		0.7

Foreign withholding tax	24,331		1.8		13,547		1.1		9,143		0.8
Change in indefinite reinvestment - Russia	—		—		(9,049)		(0.7)		—		—



Stock-based compensation	3,960		0.3		(10,000)		(0.8)		(16,304)		(1.5)






Sub-part F Income/GILTI	94,594		7.1		79,420		6.2		72,449		6.5
Foreign tax credits	(98,641)		(7.4)		(73,974)		(5.8)		(63,926)		(5.8)
Foreign source non-deductible interest	9,530		0.7		9,462		0.7		10,348		0.9
IRC section 162(m) adjustment	4,019		0.3		8,119		0.6		3,665		0.3
Brazil tourism tax benefit	(16,311)		(1.2)		(13,810)		(1.1)		—		—
Interest on net equity deduction	(15,051)		(1.1)		—		—		—		—
Other	(6,966)		(0.5)		5,762		0.5		3,497		0.3
Provision for income taxes	$	343,115	25.9	%	$	321,333	25.2	%	$	269,311	24.3	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31 are as follows (in thousands):


	2023		2022
Deferred tax assets:
Accounts receivable, principally due to the allowance for credit losses	$	20,110	$	19,508
Accrued expenses not currently deductible for tax	12,922		7,307
Lease deferral	15,767		18,146
Interest rate swap	11,994		—
Stock-based compensation	47,537		41,202
Income tax credits	84,505		62,512
Net operating loss carry forwards	134,911		81,580
Accrued escheat	3,456		3,286


Other	55,466		28,773
Deferred tax assets before valuation allowance	386,668		262,314
Valuation allowance	(165,982)		(117,379)
Deferred tax assets, net	220,686		144,935
Deferred tax liabilities:
Intangibles—including goodwill	(536,561)		(504,590)
Basis difference in investment in subsidiaries	(43,821)		(42,091)
Interest rate swap	—		(2,964)
Lease deferral	(13,589)		(15,428)
Accrued expense liability	(718)		(742)
Prepaid expenses	(1,805)		(1,713)
Withholding taxes	(26,407)		(31,448)
Property and equipment and other	(66,617)		(72,076)
Deferred tax liabilities	(689,518)		(671,052)
Net deferred tax liabilities	$	(468,832)	$	(526,117)

The Company’s deferred tax balances are classified in its balance sheets as of December 31 as follows (in thousands):


	2023		2022
Long term deferred tax assets and liabilities:
Long term deferred tax assets	$	1,400	$	1,348
Long term deferred tax liabilities	(470,232)		(527,465)

Net deferred tax liabilities	$	(468,832)	$	(526,117)

The valuation allowances relate to income tax credits, foreign net operating loss carryforwards, state net operating loss carryforwards and state 163(j) limitation on business interest carryforward. The net change in the total valuation allowance for the year ended December 31, 2023 was an increase of $48.6 million. The valuation allowance increase was primarily due to an increase in acquired foreign net operating losses where significant negative evidence on future utilization was considered.

As of December 31, 2023, the Company had a net operating loss carryforward for state income tax purposes of approximately $54.0 million that is available to offset future state tax expense, either indefinitely or in some cases subject to expiration in 15 or 20 years. Additionally, the Company had $80.9 million net operating loss carryforwards for foreign income tax purposes that are available to offset future foreign tax expense. Most foreign net operating loss carryforwards will not expire in future years. The Company has provided a valuation allowance against $71.3 million of its deferred tax asset related to the net operating losses as it does not anticipate utilizing the losses in the foreseeable future.

In addition, the Company has foreign tax credits for foreign income purposes in the amount of $84.5 million. The Company has provided a valuation allowance against $84.5 million of the tax credits as it does not anticipate utilizing the credits in the foreseeable future.

During 2023 and 2022, the Company had recorded accrued interest and penalties related to the unrecognized tax benefits of $8.1 million and $4.4 million, respectively. Accumulated interest and penalties were $30.7 million and $22.7 million on the Consolidated Balance Sheets at December 31, 2023 and 2022, respectively. In accordance with the Company's accounting policy, interest and penalties related to unrecognized tax benefits are included as a component of income tax expense.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits excluding interest and penalties for the years ended December 31, 2023, 2022, and 2021 is as follows (in thousands):


Unrecognized tax benefits at December 31, 2020	$	35,749
Additions based on tax positions related to the current year	8,543
Additions based on tax positions related to the prior year	5,909
Deductions based on settlement of prior year tax positions	(2,122)
Deductions based on expiration of prior year tax positions	(1,058)

Unrecognized tax benefits at December 31, 2021	47,021
Additions based on tax positions related to the current year	7,752

Additions based on tax positions related to the prior year	200
Deductions based on settlement of prior year tax positions	(1,550)
Addition for cumulative federal benefit of state tax deductions	7,281
Change due to OCI	(35)
Unrecognized tax benefits at December 31, 2022	60,669
Additions and deductions based on tax positions related to the current year	8,821

Additions and deductions based on tax positions related to the prior year	(1,913)

Deductions based on settlements of prior year tax positions	(104)
Deductions based on expiration of prior year tax positions	(4,235)


Change due to OCI	(132)
Unrecognized tax benefits at December 31, 2023	$	63,106

In prior years, the Company included federal benefits of state tax deductions related to unrecognized tax benefits in its tabular reconciliation above. A cumulative adjustment was made in 2022 to remove these amounts from the above tabular disclosure.

As of December 31, 2023, the Company had total unrecognized tax benefits of $63.1 million all of which, if recognized, would affect its effective tax rate. It is not anticipated that there are any unrecognized tax benefits that will significantly increase or decrease within the next twelve months.

The Company files numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The statute of limitations for the Company’s U.S. federal income tax returns has expired for years prior to 2015. The statute of limitations for most state income tax returns has expired for years prior to 2020. The statute of limitations has expired for years prior to 2018 for the Company’s Mexican income tax returns, and 2018 for the Company’s Luxembourg income tax returns.

In December 2021, the Organization for Economic Cooperation and Development (“OECD”) enacted model rules for a new global minimum tax framework (“BEPS Pillar Two”), which generally provide for a minimum effective tax rate of 15%. Various governments around the world have enacted, or are in the process of enacting, legislation on this, with certain enactments becoming effective for tax years beginning in January 2024. While we do not anticipate that these rules will have a material effect on our tax provision or effective tax rate, we continue to monitor evolving tax legislation in the jurisdictions in which we operate as such legislation becomes effective.

14. Leases

The Company primarily leases office space, data centers, vehicles, and equipment. Some of our leases contain variable lease payments, typically payments based on an index. The Company’s leases have remaining lease terms of one year to thirty years, some of which include options to extend from one to five years or more. The exercise of lease renewal options is typically at the Company's sole discretion; therefore, the majority of renewals to extend the lease terms are not reasonably certain to exercise and are not included in Right of Use (ROU) assets and lease liabilities. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement. Additional payments based on the change in an index or rate are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability as of the modification date.

Other assets include ROU assets, other current liabilities include short-term operating lease liabilities, and other non-current liabilities include long-term lease liabilities at December 31, 2023 and 2022 is as follows (in thousands):


	2023		2022
ROU assets	$	86,579	$	94,064
Short term lease liabilities	$	23,476	$	22,661
Long term lease liabilities	$	75,796	$	86,671

The Company does not recognize ROU assets and lease liabilities for short-term leases that have a term of twelve months or less. The effect of short-term leases were not material to the ROU assets and lease liabilities.

Under ASC 842, the Company discounts future lease obligations by the rate implicit in the contract, unless the rate cannot be readily determined. As most of our leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. In determining the borrowing rate, the Company considers the applicable lease terms, the Company's cost of borrowing, and for leases denominated in a foreign currency, the collateralized borrowing rate that the Company would obtain to borrow in the same currency in which the lease is denominated.

Total lease costs for the years ended December 31, 2023, 2022, and 2021 were $29.7 million, $24.1 million, and $22.6 million, respectively. Variable lease costs and short-term lease costs were immaterial for all periods presented.

The supplementary cash and non-cash disclosures for the years ended December 31, 2023, 2022, and 2021 are as follows (in thousands):


	2023		2022		2021
Cash paid for operating lease liabilities	$	31,388	$	25,403	$	23,803
ROU assets obtained in exchange for new operating lease obligations	$	22,764	$	31,204	$	29,428
Weighted-average remaining lease term (years)	5.62		6.09		5.99
Weighted-average discount rate	5.19%		3.64%		3.80%

Maturities of lease liabilities as of December 31, 2023 were as follows (in thousands):


2023	$	27,455
2024	24,566
2025	19,917
2026	12,143
2027	8,870
Thereafter	22,203
Total lease payments	115,154
Less imputed interest	15,882
Present value of lease liabilities	$	99,272

15. 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. The defendants dispute the allegations in the derivative complaints 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.

16. Derivative Financial Instruments

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 gives 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 we are 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 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 as of December 31, 2023 and 2022 (in millions) is presented in the table below.


	Notional
	2023		2022
Foreign exchange contracts:
Swaps	$	95.1	$	160.9
Forwards	21,173.0		15,159.4
Written options	19,533.3		13,701.9
Purchased options	15,750.4		11,474.2
Total	$	56,551.8	$	40,496.4

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 December 31, 2023 and 2022 (in millions):


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


December 31, 2022	Fair Value, Gross				Fair Value, Net
	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Derivatives - undesignated:


Foreign exchange contracts	$	582.2	$	540.0	$	266.9	$	224.7
Less: Cash collateral	56.1		148.2		56.1		148.2
Total net derivative assets and liabilities	$	526.1	$	391.8	$	210.8	$	76.5

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 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 December 31, 2023 and December 31, 2022 (in millions):


		2023		2022
	Balance Sheet Classification	Fair Value

Derivative Assets	Prepaid expenses and other current assets	$	254.2	$	204.9
Derivative Assets	Other assets	$	66.0	$	62.0
Derivative Liabilities	Other current liabilities	$	190.4	$	184.1
Derivative Liabilities	Other noncurrent liabilities	$	54.3	$	40.6

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 two remaining contracts (with maturity dates in 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 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 the reference rate reform, which allowed the change in critical terms without designation of the hedging relationship. This interest rate swap matured in December 2023.

In August 2023, the Company entered into eight additional receive-variable SOFR, pay-fixed interest rate swap derivative contracts with a total 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 December 31, 2023, 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 $39.4 million from accumulated other comprehensive loss resulting in a benefit to interest expense, net for the year ended December 31, 2023 related to the Company's interest rate swap contracts. Cash flows related to the Company's interest rate swap derivatives are classified as operating activities within the Consolidated Statements of Cash Flows, as such cash flows relate to hedged interest payments are recorded in operating activities.

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 table below presents the fair value of the Company’s interest rate swap contracts, as well as their classification on the Consolidated Balance Sheets, as of December 31, 2023 and 2022 (in millions). See Note 4 for additional information on the fair value of the Company’s swap contracts.


	Balance Sheet Classification	2023		2022
Derivatives designated as cash flow hedges:
Swap contracts	Prepaid expenses and other current assets	$	23.5	$	12.0

Swap contracts	Other noncurrent liabilities	$	55.8	$	—

As of December 31, 2023, the estimated net amount of the existing gains expected to be reclassified into earnings within the next 12 months is approximately $23.6 million.

Net Investment Hedge

In February 2023, the Company entered into a cross-currency interest rate swap that is designated as a net investment hedge of our investments in euro-denominated operations. This contract effectively converts $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 investmentsts. This contract also creates 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.

Hedge effectiveness is tested based on changes in 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 $9.0 million in interest expense, net for the year ended December 31, 2023 related to these excluded components. The cross-currency interest rate swap designated as a net investment hedge is recorded in other current liabilities at a fair value of $14.5 million as of December 31, 2023. Upon settlement, cash flows attributable to derivatives designated as net investment hedges will be classified as investing activities in the Consolidated Statements of Cash Flows.

The Company terminated its existing 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.

Subsequently, on February 2, 2024, the Company entered into four new cross-currency interest rate swaps that are designated as net investment hedges of the Company's 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.

17. 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 for the years ended December 31 (in thousands, except per share data) follows:


	2023		2022		2021
Net income	$	981,890	$	954,327	$	839,497
Denominator for basic earnings per share	73,155		75,598		82,060
Dilutive securities	1,232		1,264		2,001
Denominator for diluted earnings per share	74,387		76,862		84,061
Basic earnings per share	$	13.42	$	12.62	$	10.23
Diluted earnings per share	$	13.20	$	12.42	$	9.99

Diluted earnings per share for the years ended December 31, 2023, 2022 and 2021 excludes the effect of 2.0 million, 2.3 million and 1.4 million shares, respectively, of common stock that may be issued upon the exercise of employee stock options because

such effect would be antidilutive. Diluted earnings per share also excludes the effect of performance-based restricted stock for which the performance criteria have not yet been achieved, which was immaterial for 2023, 2022, and 2021.

18. Segments

The Company reports information about its 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 the Company's strategy and resulting organizational structure and management reporting, the Company updated its segment structure into six operating segments, which were combined into three reportable segments: Vehicle Payments, Corporate Payments (includes aggregation with Cross-Border operating segment), Lodging Payments and an Other category (which combines Gift and Payroll Card operating segments). We manage and report our operating results through these three reportable segments consistent with how the CODM allocates resources, assesses performance and reviews financial information. The presentation of segment information has been recast for the prior periods to align with this segment presentation for the years ended December 31, 2023, 2022 and 2021.

The Company’s segment results are as follows as of and for the years ended December 31 (in thousands):


	20231		2022		2021
Revenues, net:
Vehicle Payments	$	2,005,510	$	1,950,038	$	1,689,970
Corporate Payments	981,127		769,571		598,242
Lodging Payments	520,216		456,511		309,619
Other	250,866		251,009		235,905
	$	3,757,719	$	3,427,129	$	2,833,736
Operating income:
Vehicle Payments	$	943,399	$	884,493	$	811,822
Corporate Payments	382,085		273,562		210,290
Lodging Payments	254,270		218,637		148,973
Other	77,119		69,949		71,471
	$	1,656,873	$	1,446,641	$	1,242,556
Depreciation and amortization:
Vehicle Payments	$	201,905	$	198,495	$	195,964
Corporate Payments	78,679		72,586		52,688
Lodging Payments	46,903		42,366		26,478
Other	9,117		8,835		9,067
	$	336,604	$	322,282	$	284,197
Capital expenditures:
Vehicle Payments	$	108,592	$	111,661	$	88,999
Corporate Payments	25,387		20,777		11,748
Lodging Payments	13,705		10,570		4,604
Other	6,138		8,420		6,179
	$	153,822	$	151,428	$	111,530
Long-lived assets (excluding goodwill and investments):
Vehicle Payments	$	252,499	$	218,680	$	175,648
Corporate Payments	48,822		39,240		33,638
Lodging Payments	24,697		17,884		12,592
Other	17,136		18,888		14,416
	$	343,154	$	294,692	$	236,294

1Results from Global Reach Group acquired in the first quarter of 2023 are reported in the Corporate Payments segment from the date of acquisition. Results from Mina Digital Limited, Business Gateway AG and PayByPhone acquired during 2023 are reported in the Vehicle Payments segment, from the date of acquisition.

The Company's segment results are as follows for the quarterly periods in 2023 and 2022 (in thousands):


	Fiscal Quarters Year Ended December 31, 2023
	First		Second		Third		Fourth
Revenues, net:
Vehicle Payments	$	495,490	$	509,630	$	500,632	$	499,758
Corporate Payments	226,172		246,012		257,842		251,101
Lodging Payments	122,334		136,564		141,389		119,929
Other	57,337		55,968		71,029		66,532
	$	901,333	$	948,174	$	970,892	$	937,320
Operating income:
Vehicle Payments	$	223,480	$	232,506	$	244,908	$	242,505
Corporate Payments	80,382		95,708		104,903		101,092
Lodging Payments	54,563		68,246		74,023		57,438
Other	16,770		16,190		21,143		23,016
	$	375,195	$	412,650	$	444,977	$	424,051
Depreciation and amortization:
Vehicle Payments	$	50,350	$	51,926	$	49,905	$	49,724
Corporate Payments	20,160		17,779		20,417		20,323
Lodging Payments	11,398		11,661		12,189		11,655
Other	2,324		2,310		2,239		2,244
	$	84,232	$	83,676	$	84,750	$	83,946


	Fiscal Quarters Year Ended December 31, 2022
	First		Second		Third		Fourth
Revenues, net:
Vehicle Payments	$	454,741	$	489,827	$	504,388	$	501,082
Corporate Payments	183,158		189,058		196,339		201,016
Lodging Payments	94,576		116,900		125,961		119,074
Other	56,766		65,493		66,312		62,438
	$	789,241	$	861,278	$	893,000	$	883,610
Operating income:
Vehicle Payments	$	202,068	$	224,174	$	231,914	$	226,337
Corporate Payments	61,312		70,092		74,999		67,159
Lodging Payments	39,779		58,559		63,463		56,836
Other	14,562		17,655		18,794		18,938
	$	317,721	$	370,480	$	389,170	$	369,270
Depreciation and amortization:
Vehicle Payments	$	48,148	$	49,615	$	49,134	$	51,598
Corporate Payments	16,028		16,324		15,383		24,851
Lodging Payments	10,534		10,321		10,474		11,037
Other	2,092		2,214		2,222		2,307
	$	76,802	$	78,474	$	77,213	$	89,793

The following table presents the Company's long-lived assets by major geography (excluding goodwill, other intangible assets and investments) at December 31 (in thousands).


	2023		2022
Long-lived assets (excluding goodwill, other intangible assets, and investments):
United States (country of domicile)	$	200,918	$	176,263
Brazil	$	74,789	$	66,583
United Kingdom	$	34,242	$	24,715

More than 10% of our consolidated revenues in 2023, 2022 and 2021 were derived through our relationship with our open-loop network partner in our Vehicle Payments segment.

19. Russia Disposition

During the second quarter of 2023, the Company signed definitive documents to sell its Russia business to a third party. At June 30, 2023, the Company 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 the Company's Russian business were not classified as held for sale prior to the completion of the transaction. The Russia business was historically reported within the Company's Vehicle Payments segment and did not meet the criteria to be presented as discontinued operations. The Company completed the sale of its Russia business on August 15, 2023.

The sale included the entirety of the Company's operations in Russia and resulted in a complete exit from the Russia market. The Company 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, the Company 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, the business in Russia accounted for approximately $62.0 million and $84.7 million of the Company's consolidated income before income taxes for years ended December 31, 2023 and 2022, respectively. The Company's assets in Russia were approximately 3.2% of consolidated assets at December 31, 2022.

20. Restatement of Previous Unaudited Interim Financial Statements (Unaudited)

In connection with the preparation of the Company's financial statements as of and for the year ended December 31, 2023, the Company determined that there were errors related to the accounting for certain balance sheet accounts in the unaudited consolidated financial statements for the quarterly periods ended March 31, 2023, June 30, 2023 and September 30, 2023 (the "Restated Periods"). Such errors did not impact any previously filed audited financial statements.

In accordance with SEC Staff Accounting Bulletin No. 99, "Materiality," and SEC Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements," the Company determined that the errors were material to the unaudited interim consolidated financial statements for the Restated Periods. Specifically, such errors pertained only to the consolidated balance sheets (and the related effects on the consolidated statements of cash flows) and were related to (1) the recognition of certain cash balances held in custodial accounts for the benefit of (FBO) customers entered into in the first quarter of 2023 as restricted cash and customer deposits based on the Company's determination that it exercises control over such funds and (2) a correction to the Company's accounts receivable and accounts payable balances related to an incorrect classification of certain unbilled accounts receivable balances.

In connection with this determination, the Audit Committee of the Company’s Board of Directors, in consultation with the Company's management, concluded that the Company’s previously issued condensed consolidated financial statements and related disclosures for the Restated Periods should no longer be relied upon due to these errors contained in such interim financial statements and should be restated.

The following tables restate the unaudited financial information and summarize the effect of the restatement on each impacted financial statement line item, including subtotals, as of the dates, and for the periods, indicated (in thousands):


	As Reported		Adjustments		As Restated
Condensed Consolidated Balance Sheet as of March 31, 2023

Assets
Current assets:
Restricted cash	$	996,945	$	550,000	$	1,546,945
Accounts and other receivables	2,369,235		(1,380)		2,367,855
Other current assets	2,992,792		—		2,992,792
Total current assets	6,358,972		548,620		6,907,592
Goodwill	5,380,050		—		5,380,050
Other intangibles, net	2,197,587		—		2,197,587
Other noncurrent assets	651,314		—		651,314
Total assets	$	14,587,923	$	548,620	$	15,136,543
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	1,907,841	$	(1,380)	$	1,906,461
Customer deposits	1,481,004		550,000		2,031,004
Other current liabilities	2,814,700		—		2,814,700
Total current liabilities	6,203,545		548,620		6,752,165
Notes payable and other obligations, less current portion	4,700,550		—		4,700,550
Other noncurrent liabilities	801,968		—		801,968
Total noncurrent liabilities	5,502,518		—		5,502,518
Stockholders' equity:
Additional paid-in capital	3,109,065		—		3,109,065
Retained earnings	7,425,604		—		7,425,604
Other equity	(7,652,809)		—		(7,652,809)
Total stockholders' equity	2,881,860		—		2,881,860
Total liabilities and stockholders’ equity	$	14,587,923	$	548,620	$	15,136,543


	As Reported		Adjustments		As Restated
Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2023

Operating activities
Net income	$	214,835	$	—	$	214,835
Adjustments to reconcile net income to net cash provided by operating activities
Changes in operating assets and liabilities:
Accounts and other receivables	370,962		1,380		372,342
Accounts payable, accrued expenses and customer deposits	(446,508)		548,620		102,112
Other	188,376		—		188,376
Net cash provided by operating activities	327,665		550,000		877,665
Investing activities
Net cash used in investing activities	(159,027)		—		(159,027)
Financing activities
Borrowings from revolver	1,964,000		—		1,964,000
Payments on revolver	(2,490,000)		—		(2,490,000)
Borrowings on swing line of credit, net	310,719		—		310,719
Other	(2,434)		—		(2,434)
Net cash used in financing activities	(217,715)		—		(217,715)
Effect of foreign currency exchange rates on cash	29,298		—		29,298
Net increase/(decrease) in cash, cash equivalents and restricted cash	(19,779)		550,000		530,221
Cash, cash equivalents and restricted cash at beginning of period	2,289,180		—		2,289,180
Cash, cash equivalents and restricted cash at end of period	$	2,269,401	$	550,000	$	2,819,401


	As Reported		Adjustments		As Restated
Condensed Consolidated Balance Sheet as of June 30, 2023

Assets
Current assets:
Restricted cash	$	1,456,992	$	272,280	$	1,729,272
Accounts and other receivables	2,460,650		(9,850)		2,450,800
Other current assets	3,005,927		—		3,005,927
Total current assets	6,923,569		262,430		7,185,999
Goodwill	5,473,603		—		5,473,603
Other intangibles, net	2,107,081		—		2,107,081
Other noncurrent assets	674,400		—		674,400
Total assets	$	15,178,653	$	262,430	$	15,441,083
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	1,679,702	$	(9,850)	$	1,669,852
Customer deposits	2,013,236		272,280		2,285,516
Other current liabilities	2,742,952		—		2,742,952
Total current liabilities	6,435,890		262,430		6,698,320
Notes payable and other obligations, less current portion	4,678,258		—		4,678,258
Other noncurrent liabilities	801,069		—		801,069
Total noncurrent liabilities	5,479,327		—		5,479,327
Stockholders' equity:
Additional paid-in capital	3,176,562		—		3,176,562
Retained earnings	7,665,306		—		7,665,306
Other equity	(7,578,432)		—		(7,578,432)
Total stockholders' equity	3,263,436		—		3,263,436
Total liabilities and stockholders’ equity	$	15,178,653	$	262,430	$	15,441,083


	As Reported		Adjustments		As Restated
Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2023

Operating activities
Net income	$	454,537	$	—	$	454,537
Adjustments to reconcile net income to net cash provided by operating activities
Changes in operating assets and liabilities:
Accounts and other receivables	(365,572)		9,850		(355,722)
Accounts payable, accrued expenses and customer deposits	348,643		262,430		611,073
Other	389,072		—		389,072
Net cash provided by operating activities	826,680		272,280		1,098,960
Investing activities
Net cash used in investing activities	(201,215)		—		(201,215)
Financing activities
Borrowings from revolver	4,351,000		—		4,351,000
Payments on revolver	(4,817,000)		—		(4,817,000)
Borrowings on swing line of credit, net	255,750		—		255,750
Other	(31,561)		—		(31,561)
Net cash used in financing activities	(241,811)		—		(241,811)
Effect of foreign currency exchange rates on cash	38,401		—		38,401
Net increase in cash, cash equivalents and restricted cash	422,055		272,280		694,335
Cash, cash equivalents and restricted cash at beginning of period	2,289,180		—		2,289,180
Cash, cash equivalents and restricted cash at end of period	$	2,711,235	$	272,280	$	2,983,515


	As Reported		Adjustments		As Restated
Condensed Consolidated Balance Sheet as of September 30, 2023

Assets
Current assets:
Restricted cash	$	1,221,279	$	480,761	$	1,702,040
Accounts and other receivables	2,655,275		(76,674)		2,578,601
Other current assets	2,983,704		—		2,983,704
Total current assets	6,860,258		404,087		7,264,345
Goodwill	5,553,546		—		5,553,546
Other intangibles, net	2,164,999		—		2,164,999
Other noncurrent assets	685,664		—		685,664
Total assets	$	15,264,467	$	404,087	$	15,668,554
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	1,895,280	$	(76,674)	$	1,818,606
Customer deposits	1,783,311		480,761		2,264,072
Other current liabilities	3,059,628		—		3,059,628
Total current liabilities	6,738,219		404,087		7,142,306
Notes payable and other obligations, less current portion	4,637,211		—		4,637,211
Other noncurrent liabilities	829,586		—		829,586
Total noncurrent liabilities	5,466,797		—		5,466,797
Stockholders' equity:
Additional paid-in capital	3,227,476		—		3,227,476
Retained earnings	7,936,802		—		7,936,802
Other equity	(8,104,827)		—		(8,104,827)
Total stockholders' equity	3,059,451		—		3,059,451
Total liabilities and stockholders’ equity	$	15,264,467	$	404,087	$	15,668,554


	As Reported		Adjustments		As Restated
Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2023

Operating activities
Net income	$	726,033	$	—	$	726,033
Adjustments to reconcile net income to net cash provided by operating activities
Changes in operating assets and liabilities:
Accounts and other receivables	(809,487)		76,674		(732,813)
Accounts payable, accrued expenses and customer deposits	428,580		404,087		832,667
Other	558,743		—		558,743
Net cash provided by operating activities	903,869		480,761		1,384,630
Investing activities
Acquisitions, net of cash acquired	(429,914)		—		(429,914)
Proceeds from disposal of business, net of cash disposed	197,025		—		197,025
Other	(112,757)		—		(112,757)
Net cash used in investing activities	(345,646)		—		(345,646)
Financing activities
Repurchase of common stock	(546,910)		—		(546,910)
Borrowings from revolver	6,495,000		—		6,495,000
Payments on revolver	(6,770,000)		—		(6,770,000)
Borrowings on swing line of credit, net	180,723		—		180,723
Other	139,728		—		139,728
Net cash used in financing activities	(501,459)		—		(501,459)
Effect of foreign currency exchange rates on cash	(30,431)		—		(30,431)
Net increase in cash, cash equivalents and restricted cash	26,333		480,761		507,094
Cash, cash equivalents and restricted cash at beginning of period	2,289,180		—		2,289,180
Cash, cash equivalents and restricted cash at end of period	$	2,315,513	$	480,761	$	2,796,274

There is no impact to the previously filed Consolidated Statements of Income and Consolidated Statements of Comprehensive Income, or any line item therein, for the Restated Periods. The as-filed Statements of Income have been provided below for reference.


	As Reported		As Reported		As Reported		As Reported		As Reported
Condensed Consolidated Statements of Income	Three Months Ended March 31, 2023		Three Months Ended June 30, 2023		Three Months Ended September 30, 2023		Six Months Ended June 30, 2023		Nine Months Ended September 30, 2023

Revenues, net	$	901,333	$	948,174	$	970,892	$	1,849,507	$	2,820,399
Expenses:
Processing	204,967		205,265		208,217		410,232		618,449
Selling	81,592		86,412		85,954		168,004		253,958
General and administrative	154,684		159,356		147,839		314,040		461,879
Depreciation and amortization	84,232		83,676		84,750		167,908		252,658
Other operating, net	663		815		(845)		1,478		633
Operating income	375,195		412,650		444,977		787,845		1,232,822
Investment (gain) loss	(190)		18		30		(172)		(142)
Other expense (income), net	746		(2,424)		(13,432)		(1,678)		(15,110)
Interest expense, net	79,795		88,486		88,285		168,281		256,566
Total other expense, net	80,351		86,080		74,883		166,431		241,314
Income before income taxes	294,844		326,570		370,094		621,414		991,508
Provision for income taxes	80,009		86,868		98,598		166,877		265,475
Net income	$	214,835	$	239,702	$	271,496	$	454,537	$	726,033
Earnings per share:
Basic earnings per share	$	2.92	$	3.24	$	3.71	$	6.17	$	9.87
Diluted earnings per share	$	2.88	$	3.20	$	3.64	$	6.08	$	9.72
Weighted average shares outstanding:
Basic weighted average shares outstanding	73,521		73,887		73,165		73,705		73,523
Diluted weighted average shares outstanding	74,483		75,001		74,604		74,763		74,733

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