Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign currency risk

Foreign Earnings

Our international businesses expose us to foreign currency exchange rate changes that can impact translations of foreign-

denominated assets and liabilities into U.S. dollars and future earnings and cash flows from transactions denominated in

different currencies. Revenues from our international businesses were 47.7% and 45.6% of total revenues for the years ended

December 31, 2024 and 2023, respectively. We measure foreign currency exchange risk based on changes in foreign currency

exchange rates using a sensitivity analysis. The sensitivity analysis measures the potential change in earnings based on a

hypothetical 10% change in currency exchange rates. Such analysis indicated that a hypothetical 10% change in foreign

currency exchange rates would have increased or decreased consolidated operating income during the year ended December 31,

2024 by approximately $97.8 million had the U.S. dollar exchange rate increased or decreased relative to the currencies to

which we had exposure. Similarly, the analysis for the prior year indicated that a hypothetical 10% change in currency

exchange rates would have increased or decreased consolidated operating income for the years ended December 31, 2023 by

approximately $86.0 million had the U.S. dollar exchange rate increased or decreased relative to the currencies to which we had

exposure.

Unhedged Cross-Currency Risk

With our cross-border payment solutions, we have additional foreign exchange risk and associated foreign exchange risk

management requirements due to the nature of our cross-border payments provider business. The majority of cross-border

payments revenue is from exchanges of currency at spot rates, which enable customers to make cross-currency payments. In our

cross-border payment solutions, we also write foreign currency forward and option contracts for customers to facilitate future

payments. The duration of these derivative contracts at inception is generally less than one year. We aggregate foreign

exchange exposures arising from customer contracts, including the derivative contracts described above, and hedge (economic

hedge) the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties.

Interest rate risk

We are exposed to the risk of changing interest rates on our cash investments and on the unhedged portion of our variable rate

debt. As of December 31, 2024 and 2023, we had $6.7 billion and $5.4 billion, respectively, of variable rate debt outstanding

under our Credit Agreement. See Note 11 to our Consolidated Financial Statements within this Form 10-K for further

information. We use derivative financial instruments to reduce our exposure related to changes in interest rates. As of

December 31, 2024, we had a number of receive-variable SOFR, pay-fixed interest rate swap derivative contracts with a

cumulative notional U.S. dollar value of $4.5 billion. The objective of these contracts is to reduce the variability of cash flows

in the previously unhedged interest payments associated with variable rate debt, the sole source of which is due to changes in

SOFR benchmark interest rate. While these agreements are intended to lessen the impact of rising interest rates on us, they also

expose us to the risk that the other parties to the agreements will not perform, we could incur significant costs associated with

the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as

highly-effective cash flow hedges under GAAP. See Note 16 to our Consolidated Financial Statements within this Form 10-K

for further information.

Based on the amounts and mix of our fixed and floating rate debt (exclusive of our Securitization Facility but inclusive of the

aforementioned interest rate swaps) at December 31, 2024 and 2023, if market interest rates had increased or decreased an

average of 100 basis points, our interest expense for the years ended December 31, 2024 and 2023 would have changed by

approximately $22 million and $14 million, respectively. We determined these amounts by considering the impact of the

hypothetical interest rates on our borrowing costs. These analyses do not consider the effects of changes in the level of overall

economic activity that could exist in such an environment.

Fuel price risk

A majority of our Vehicle Payments customers use our products and services in connection with the purchase of fuel.

Accordingly, our revenue is affected by fuel prices, which are subject to significant volatility. A decline in retail fuel prices

could cause a change in our revenue from several sources, including fees paid to us based on a percentage of each customer’s

total purchase. Changes in the absolute price of fuel may also impact unpaid account balances and the late fees and charges

based on these amounts. The impact of changes in fuel price is somewhat mitigated by our agreements with certain merchants,

where the price paid to the merchant is equal to the lesser of the merchant’s cost plus a markup or a percentage of the

transaction purchase price. We do not enter into any fuel price derivative instruments.

Fuel price spread risk

From our merchant and network relationships, we derive revenue from the difference between the price charged to a fleet

customer for a transaction and the price paid to the merchant or network for the same transaction. For certain of our payment

products, the price paid to a merchant or network is calculated as the merchant’s wholesale cost of fuel plus a markup. The

merchant’s wholesale cost of fuel is dependent on several factors including, among others, the factors described above affecting

fuel prices. The fuel price that we charge to our customer is dependent on several factors including, among others, the fuel price

paid to the fuel merchant, posted retail fuel prices and competitive fuel prices. We experience fuel price spread contraction

when the merchant’s wholesale cost of fuel increases at a faster rate than the fuel price we charge to our customers, or the fuel

price we charge to our customers decreases at a faster rate than the merchant’s wholesale cost of fuel. Accordingly, if fuel price

spreads contract, we may generate less revenue, which could adversely affect our operating results. The impact of volatility in

fuel spreads is somewhat mitigated by our agreements with certain merchants, where the price paid to the merchant is equal to

cost plus a markup or a percentage of the transaction purchase price.