Item 1. Financial Statements

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Item 1. Financial Statements

Corpay, Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Share and Par Value Amounts)


	June 30, 2024		December 31, 2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,357,567	$	1,389,648
Restricted cash	2,189,729		1,751,887
Accounts and other receivables (less allowance for credit losses of $139,338 at June 30, 2024 and $180,163 at December 31, 2023)	2,412,011		2,161,586
Securitized accounts receivable—restricted for securitization investors	1,409,000		1,307,000
Assets held for sale	78,592		—
Prepaid expenses and other current assets	528,798		474,144

Total current assets	7,975,697		7,084,265
Property and equipment, net	357,759		343,154

Goodwill	5,545,966		5,644,958
Other intangibles, net	1,956,855		2,085,663
Investments	64,039		69,521
Other assets	296,219		248,691
Total assets	$	16,196,535	$	15,476,252
Liabilities and equity
Current liabilities:
Accounts payable	$	1,902,909	$	1,624,995
Accrued expenses	367,753		356,118
Customer deposits	2,763,554		2,397,279
Securitization facility	1,409,000		1,307,000
Current portion of notes payable and lines of credit	1,106,744		819,749
Liabilities held for sale	9,504		—
Other current liabilities	283,083		320,612
Total current liabilities	7,842,547		6,825,753
Notes payable and other obligations, less current portion	4,817,634		4,596,156
Deferred income taxes	445,207		470,232
Other noncurrent liabilities	315,554		301,752
Total noncurrent liabilities	5,578,395		5,368,140
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.001 par value; 475,000,000 shares authorized; 129,703,817 shares issued and 69,408,935 shares outstanding at June 30, 2024; and 128,759,639 shares issued and 71,715,804 shares outstanding at December 31, 2023	130		129
Additional paid-in capital	3,418,512		3,266,185
Retained earnings	8,674,053		8,192,659
Accumulated other comprehensive loss	(1,498,985)		(1,289,099)
Less treasury stock, 60,294,882 shares at June 30, 2024 and 57,043,835 shares at December 31, 2023	(7,843,005)		(6,887,515)
Total Corpay stockholders’ equity	2,750,705		3,282,359
Noncontrolling interest	24,888		—
Total equity	2,775,593		3,282,359
Total liabilities and equity	$	16,196,535	$	15,476,252


See accompanying notes to unaudited consolidated financial statements.

Corpay, Inc. and Subsidiaries

Unaudited Consolidated Statements of Income

(In Thousands, Except Per Share Amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues, net	$	975,710	$	948,174	$	1,910,961	$	1,849,507
Expenses:
Processing	209,199		205,265		416,610		410,232
Selling	95,044		86,412		189,232		168,004
General and administrative	153,777		159,356		305,039		314,040
Depreciation and amortization	84,342		83,676		169,102		167,908
Other operating, net	9		815		301		1,478
Operating income	433,339		412,650		830,677		787,845
Other expenses:
Investment (gain) loss	(36)		18		(203)		(172)
Other expense (income), net	4,496		(2,424)		7,623		(1,678)
Interest expense, net	94,677		88,486		183,765		168,281

Total other expense	99,137		86,080		191,185		166,431
Income before income taxes	334,202		326,570		639,492		621,414
Provision for income taxes	82,539		86,868		158,026		166,877
Net income	251,663		239,702		481,466		454,537
Less: Net income attributable to noncontrolling interest	38		—		72		—
Net income attributable to Corpay	$	251,625	$	239,702	$	481,394	$	454,537
Earnings per share:
Basic earnings per share attributable to Corpay	$	3.59	$	3.24	$	6.79	$	6.17
Diluted earnings per share attributable to Corpay	$	3.52	$	3.20	$	6.64	$	6.08
Weighted average shares outstanding:
Basic shares	70,107		73,887		70,934		73,705
Diluted shares	71,497		75,001		72,516		74,763

See accompanying notes to unaudited consolidated financial statements.

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Corpay, Inc. and Subsidiaries

Unaudited Consolidated Statements of Comprehensive Income

(In Thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income	$	251,663	$	239,702	$	481,466	$	454,537
Other comprehensive (loss) income:
Foreign currency translation (losses) gains, net of tax	(161,834)		59,549		(257,946)		140,656

Net change in derivative contracts, net of tax	697		17,204		44,819		11,731
Total other comprehensive (loss) income, net of tax	(161,137)		76,753		(213,127)		152,387
Total comprehensive income	90,526		316,455		268,339		606,924
Comprehensive loss attributable to noncontrolling interest	2,961		—		3,169		—
Comprehensive income attributable to Corpay	$	93,487	$	316,455	$	271,508	$	606,924

See accompanying notes to unaudited consolidated financial statements.

Corpay, Inc. and Subsidiaries

Unaudited Consolidated Statements of Equity

(In Thousands)


	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Corpay Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance at December 31, 2023	$	129	$	3,266,185	$	8,192,659	$	(1,289,099)	$	(6,887,515)	$	3,282,359	$	—	$	3,282,359
Net income	—		—		229,769		—		—		229,769		34		229,803
Other comprehensive loss, net of tax	—		—		—		(51,748)		—		(51,748)		(242)		(51,990)
Acquisition of noncontrolling interest	—		—		—		—		—		—		28,057		28,057
Acquisition of common stock	—		—		—		—		(321,776)		(321,776)		—		(321,776)
Stock-based compensation	—		24,979		—		—		—		24,979		—		24,979
Issuance of common stock	1		90,837		—		—		—		90,838		—		90,838
Balance at March 31, 2024	130		3,382,001		8,422,428		(1,340,847)		(7,209,291)		3,254,421		27,849		3,282,270
Net income	—		—		251,625		—		—		251,625		38		251,663
Other comprehensive loss, net of tax	—		—		—		(158,138)		—		(158,138)		(2,999)		(161,137)
Acquisition of common stock	—		—		—		—		(633,714)		(633,714)		—		(633,714)
Stock-based compensation	—		27,108		—		—		—		27,108		—		27,108
Issuance of common stock	—		9,403		—		—		—		9,403		—		9,403
Balance at June 30, 2024	$	130	$	3,418,512	$	8,674,053	$	(1,498,985)	$	(7,843,005)	$	2,750,705	$	24,888	$	2,775,593


	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Corpay Stockholders' Equity		Noncontrolling Interest		Total Equity
Balance at December 31, 2022	$	128	$	3,049,570	$	7,210,769	$	(1,509,650)	$	(6,209,324)	$	2,541,493	$	—	$	2,541,493
Net income	—		—		214,835		—		—		214,835		—		214,835
Other comprehensive income, net of tax	—		—		—		75,634		—		75,634		—		75,634
Acquisition of common stock	—		—		—		—		(9,597)		(9,597)		—		(9,597)
Stock-based compensation	—		26,096		—		—		—		26,096		—		26,096
Issuance of common stock	—		33,399		—		—		—		33,399		—		33,399
Balance at March 31, 2023	128		3,109,065		7,425,604		(1,434,016)		(6,218,921)		2,881,860		—		2,881,860
Net income	—		—		239,702		—		—		239,702		—		239,702
Other comprehensive income, net of tax	—		—		—		76,753		—		76,753		—		76,753
Acquisition of common stock	—		—		—		—		(2,376)		(2,376)		—		(2,376)
Stock-based compensation	—		34,748		—		—		—		34,748		—		34,748
Issuance of common stock	—		32,749		—		—		—		32,749		—		32,749
Balance at June 30, 2023	$	128	$	3,176,562	$	7,665,306	$	(1,357,263)	$	(6,221,297)	$	3,263,436	$	—	$	3,263,436

See accompanying notes to unaudited consolidated financial statements.

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Corpay, Inc. and Subsidiaries

Unaudited Consolidated Statements of Cash Flows

(In Thousands)


	Six Months Ended June 30,
	2024		2023
Operating activities
Net income	$	481,466	$	454,537
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	58,443		53,739
Stock-based compensation	52,087		60,844
Provision for credit losses on accounts and other receivables	53,485		74,418
Amortization of deferred financing costs and discounts	4,080		3,574
Amortization of intangible assets and premium on receivables	110,659		114,169


Deferred income taxes	(9,675)		(11,799)
Investment gain	(203)		(172)

Other non-cash operating expense, net	301		1,478
Changes in operating assets and liabilities (net of acquisitions):
Accounts and other receivables	(497,284)		(355,722)
Prepaid expenses and other current assets	(76,983)		78,035
Derivative assets and liabilities, net	5,224		(14,611)
Other assets	(18,313)		29,397

Accounts payable, accrued expenses and customer deposits	727,818		611,073
Net cash provided by operating activities	891,105		1,098,960
Investing activities
Acquisitions, net of cash acquired	(59,871)		(126,694)
Purchases of property and equipment	(85,289)		(78,922)

Other	(1,453)		4,401
Net cash used in investing activities	(146,613)		(201,215)
Financing activities
Proceeds from issuance of common stock	100,241		66,148
Repurchase of common stock	(947,074)		(11,973)
Borrowings (payments) on securitization facility, net	102,000		(39,000)
Deferred financing costs	(3,176)		—
Proceeds from notes payable	325,000		—
Principal payments on notes payable	(51,063)		(47,000)
Borrowings from revolver	4,153,000		4,351,000
Payments on revolver	(3,811,000)		(4,817,000)
(Payments) borrowings on swing line of credit, net	(109,247)		255,750

Other	2,081		264
Net cash used in financing activities	(239,238)		(241,811)
Effect of foreign currency exchange rates on cash	(99,493)		38,401
Net increase in cash and cash equivalents and restricted cash	405,761		694,335
Cash and cash equivalents and restricted cash, beginning of period	3,141,535		2,289,180
Cash and cash equivalents and restricted cash, end of period	$	3,547,296	$	2,983,515
Supplemental cash flow information
Cash paid for interest	$	237,912	$	215,850
Cash paid for income taxes	$	185,333	$	238,769



See accompanying notes to unaudited consolidated financial statements.

Corpay, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

June 30, 2024

1. Summary of Significant Accounting Policies

Basis of Presentation

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

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

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

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. These financial statements were prepared using information reasonably available to us as of June 30, 2024 and through the date of this Quarterly Report. The accounting estimates used in the preparation of the Company’s interim consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from these estimates.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries as well as intra-entity balances denominated in foreign currency and designated for long-term investment are translated into U.S. dollars at the rates of exchange in effect at period-end. The related translation adjustments are recorded to accumulated other comprehensive loss. Income and expenses are translated at the average monthly rates of exchange in effect during the year. Gains and losses from foreign currency transactions of these subsidiaries are included in net income. The Company recognized foreign exchange losses (gains), which are recorded within Other expense (income), net in the Unaudited Consolidated Statements of Income, for the three and six months ended June 30, 2024 and 2023 as follows (in millions):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Foreign exchange losses (gains)	$	3.9	$	(0.9)	$	7.0	$	(0.2)

The Company recorded foreign currency losses and gains on long-term intra-entity transactions included as a component of foreign currency translation (losses) gains, net of tax, in the Unaudited Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023 as follows (in millions):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Foreign currency losses (gains) on long-term intra-entity transactions	$	68.4	$	(7.4)	$	80.8	$	(12.3)

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

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remaining financial assets measured at amortized cost basis are evaluated based on underlying financial condition, credit history, and current and forward-looking economic conditions. The estimation process for expected credit losses includes consideration of qualitative and quantitative risk factors associated with the age of asset balances, expected timing of payment, contract terms and conditions, changes in specific customer risk profiles or mix of customers, geographic risk, economic trends and relevant environmental factors. The Company's provision for credit losses is recorded within processing expenses in the Unaudited Consolidated Statements of Income.

Revenue

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

Our revenue is generally reported net of the cost for underlying products and services purchased through our payment solutions. In this report, we refer to this net revenue as "revenue". Revenues from contracts with customers, within the scope of ASC 606, "Revenue Recognition", represent approximately 85% and 86% of total consolidated revenues, net, for the six months ended June 30, 2024 and 2023, respectively. In its cross-border payments business, the Company enters into foreign currency forwards, option derivative contracts and swaps for its customers to facilitate future payments in foreign currencies. These contracts are accounted for in accordance with ASC 815, "Derivatives and Hedging" and represent approximately 8% and 7% of total consolidated revenues for the six months ended June 30, 2024 and 2023, respectively. Additionally, the Company accounts for revenue from late fees and finance charges, in jurisdictions where permitted under local regulations, primarily in the U.S., Canada and Brazil, in accordance with ASC 310, "Receivables". Such fees are recognized net of a provision for estimated uncollectible amounts, at the time the fees and finance charges are assessed and services are provided and represent approximately 4% and 6% of total consolidated revenues, net for the six months ended June 30, 2024 and 2023, respectively. The Company's remaining revenue represents float revenue earned on invested customer funds in jurisdictions where permitted. Such revenue represented approximately 3% and 1% of consolidated revenues, net for the six months ended June 30, 2024 and 2023, respectively.

Disaggregation of Revenues

Revenues, net by segment for the three and six months ended June 30, 2024 and 2023 was as follows (in millions, except percentages):


Revenues, net by Segment*	Three Months Ended June 30,								Six Months Ended June 30,
	2024		%		2023		%		2024		%		2023		%
Vehicle Payments	$	510.3	52	%	$	509.6	54	%	$	1,004.3	53	%	$	1,005.1	54	%
Corporate Payments	288.5		30	%	246.0		26	%	553.9		29	%	472.2		26	%
Lodging Payments	122.4		13	%	136.6		14	%	233.7		12	%	258.9		14	%
Other	54.6		6	%	56.0		6	%	119.1		6	%	113.3		6	%
Consolidated revenues, net	$	975.7	100	%	$	948.2	100	%	$	1,911.0	100	%	$	1,849.5	100	%

*Columns may not calculate due to rounding.

Revenue by geography for the three and six months ended June 30, 2024 and 2023 was as follows (in millions, except percentages):


Revenues, net by Geography*	Three Months Ended June 30,								Six Months Ended June 30,
	2024		%		2023		%		2024		%		2023		%
United States	$	528.5	54	%	$	534.7	56	%	$	1,033.2	54	%	$	1,048.4	57	%
Brazil	149.1		15	%	126.1		13	%	297.5		16	%	247.8		13	%
United Kingdom	124.5		13	%	111.2		12	%	245.8		13	%	218.9		12	%
Other	173.6		18	%	176.2		19	%	334.4		17	%	334.4		18	%
Consolidated revenues, net	$	975.7	100	%	$	948.2	100	%	$	1,911.0	100	%	$	1,849.5	100	%


*Columns may not calculate due to rounding.

Contract Liabilities

Deferred revenue contract liabilities for customers subject to ASC 606 were $41.8 million and $45.7 million as of June 30, 2024 and December 31, 2023, respectively. We expect to recognize approximately $29.9 million of these amounts in revenues within 12 months and the remaining $11.9 million over the next five years as of June 30, 2024. Revenue recognized in the six months ended June 30, 2024 that was included in the deferred revenue contract liability as of December 31, 2023 was approximately $22.2 million.

Spot Trade Offsetting

The Company uses spot trades to facilitate cross-currency corporate payments in its cross-border payments business. The Company applies offsetting to spot trade assets and liabilities associated with contracts that include master netting agreements with the same counterparty, as a right of setoff exists, which the Company believes to be enforceable. As such, the Company has netted spot trade liabilities against spot trade receivables at the counter-party level. The Company recognizes all spot trade assets, net in accounts receivable and all spot trade liabilities, net in accounts payable, each net at the customer level, in its Consolidated Balance Sheets at their fair value. The following table presents the Company’s spot trade assets and liabilities at their fair value at June 30, 2024 and December 31, 2023 (in millions):


	June 30, 2024						December 31, 2023
	Gross		Offset on the Balance Sheet		Net		Gross		Offset on the Balance Sheet		Net
Assets
Accounts Receivable	$	3,089.2	$	(2,885.8)	$	203.4	$	2,499.9	$	(2,373.8)	$	126.1
Liabilities
Accounts Payable	$	2,969.0	$	(2,885.8)	$	83.2	$	2,457.3	$	(2,373.8)	$	83.5

Reclassifications

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

Recent Accounting Pronouncements Not Yet Adopted

Segment Reporting

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". The ASU enhances disclosures about significant reportable 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 this guidance will have 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, but retrospective application is permitted. We are currently evaluating the impact that this guidance will have on the disclosures within our consolidated financial statements.

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2. Accounts and Other Receivables

The Company's accounts and securitized accounts receivable include the following at June 30, 2024 and December 31, 2023 (in thousands):


	June 30, 2024		December 31, 2023
Gross domestic accounts receivable	$	1,118,540	$	921,206
Gross domestic securitized accounts receivable	1,409,000		1,307,000
Gross foreign receivables	1,432,809		1,420,543


Total gross receivables	3,960,349		3,648,749
Less allowance for credit losses	(139,338)		(180,163)
Net accounts and securitized accounts receivables	$	3,821,011	$	3,468,586

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

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

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

A roll forward of the Company’s allowance for credit losses related to accounts receivable for the six months ended June 30, 2024 and 2023 is as follows (in thousands):


	2024		2023
Allowance for credit losses beginning of period	$	180,163	$	149,846
Provision for credit losses	53,485		74,418
Write-offs	(85,262)		(65,167)
Recoveries	6,470		5,943
Impact of foreign currency	(15,518)		7,040

Allowance for credit losses end of period	$	139,338	$	172,080

The provision for credit losses decreased during the six months ended June 30, 2024 versus the comparable prior period primarily due to improved customer loss rates in the Company's U.S. Vehicle Payments business. Write-offs include fully reserved receivables against the allowance.

3. Fair Value Measurements

The following table presents the Company’s financial assets and liabilities which are measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 (in thousands):


	Fair Value		Level 1		Level 2		Level 3
June 30, 2024
Assets:
Overnight deposits	$	173,613	$	—	$	173,613	$	—
Money market	154,957		—		154,957		—
Certificates of deposit	322,601		—		322,601		—
Treasury bills	372,437		—		372,437		—
Interest rate swaps	37,545		—		37,545		—
Cross-currency interest rate swaps	14,922		—		14,922		—
Foreign exchange contracts	321,883		—		321,883		—
Total assets	$	1,397,958	$	—	$	1,397,958	$	—
Cash collateral for foreign exchange contracts	$	33,366
Liabilities:
Interest rate swaps	$	10,377	$	—	10,377		—
Cross-currency interest rate swaps	27,391		—		27,391		—
Foreign exchange contracts	251,636		—		251,636		—
Total liabilities	$	289,404	$	—	$	289,404	$	—
Cash collateral obligation for foreign exchange contracts	$	295,484

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

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 June 30, 2024 and December 31, 2023.

The Company regularly evaluates the carrying value of its investments. The carrying amount of investments without readily determinable fair values was $64.0 million and $69.5 million at June 30, 2024 and December 31, 2023, respectively.

4. Stockholders' Equity

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

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During the six months ended June 30, 2024, the Company repurchased 3,251,047 shares for an aggregate purchase price of $949.1 million. Since the beginning of the Program through June 30, 2024, 32,129,909 shares have been repurchased for an aggregate purchase price of $7.5 billion, leaving the Company up to $0.6 billion of remaining authorization available under the Program for future repurchases of shares of its common stock.

5. Stock-Based Compensation

The following table summarizes the expense recognized within general and administrative expenses in the Unaudited Consolidated Statements of Income related to stock-based compensation for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Stock options	$	5,123	$	4,611	$	11,242	$	13,561
Restricted stock	21,985		30,137		40,845		47,283
Stock-based compensation	$	27,108	$	34,748	$	52,087	$	60,844

The tax benefits recorded on stock-based compensation and upon the exercises of options were $18.4 million and $6.3 million for the six months ended June 30, 2024 and 2023, respectively.

The following table summarizes the Company’s total unrecognized compensation cost related to outstanding stock awards as of June 30, 2024 (cost in thousands):


	Unrecognized Compensation Cost		Weighted Average Period of Expense Recognition Remaining (in Years)
Stock options	$	44,454	2.24
Restricted stock	79,240		1.04
Total	$	123,694

Stock Options

The following summarizes the changes in the number of shares of stock options outstanding for the six months ended June 30, 2024 (shares and aggregate intrinsic value in thousands):


	Shares	Weighted Average Exercise Price		Options Exercisable at End of Period	Weighted Average Exercise Price of Exercisable Options		Weighted Average Fair Value of Options Granted During the Period		Aggregate Intrinsic Value
Outstanding at December 31, 2023	4,983	$	192.18	3,182	$	163.54			$	451,039
Granted	142	273.01					$	95.98
Exercised	(579)	172.50							$	65,377
Forfeited	(55)	226.62
Outstanding at June 30, 2024	4,491	$	196.82	2,862	$	167.07			$	314,694
Expected to vest as of June 30, 2024	780	$	235.77

The aggregate intrinsic value of stock options exercisable at June 30, 2024 was $285.3 million. The weighted average remaining contractual term of options exercisable at June 30, 2024 was 2.9 years.

Restricted Stock

The following table summarizes the changes in the number of shares of restricted stock awards and restricted stock units outstanding for the six months ended June 30, 2024 (shares in thousands):


	Shares	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	542	$	219.61
Granted	347	276.44
Issued	(365)	225.19
Cancelled	(47)	227.06
Outstanding at June 30, 2024	477	$	255.95

6. Acquisitions

2024 Acquisitions

In March 2024, the Company acquired 70% of Zapay, a Brazil-based digital consumer mobility solution for paying vehicle-related taxes and compliance fees, for approximately $59.5 million, net of cash. As part of the agreement, the Company has the right to acquire the remainder of Zapay in four years from the acquisition date. The majority investment in Zapay further scales the Company's Vehicle Payments business in Brazil. Results from the Zapay acquisition have been included in the Company's Vehicle Payments segment from the date of the acquisition.

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

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


Trade and other receivables	$	2,542
Prepaid expenses and other current assets	112
Other long term assets	960
Goodwill	81,064
Intangibles	18,624
Accounts payable	(1,486)
Other current liabilities	(7,884)
Other noncurrent liabilities	(6,332)
Total fair value of net assets acquired	$	87,600
Less: Noncontrolling interest	(28,057)
Aggregate purchase price	$	59,543

In May 2024, the Company signed definitive agreements to acquire 100% of Paymerang, a U.S.-based leader in accounts payables automation solutions, for approximately $469 million, net of cash. The acquisition expands Corpay's presence in several market verticals, including education, healthcare, hospitality and manufacturing. The acquisition of Paymerang closed on July 1, 2024, and thus the preliminary acquisition accounting has not yet been completed. The results of Paymerang will be reflected in the Company's Corporate Payments segment and financial statements during the third quarter of 2024.

In June 2024, the Company signed a definitive agreement to acquire 100% of GPS Capital Markets, LLC ("GPS") for approximately $725 million. GPS provides business-to-business cross-border and treasury management solutions to upper middle market companies, primarily in the U.S. The transaction is expected to close in early 2025, subject to regulatory approval and standard closing conditions and will be reflected in the Company's Corporate Payments segment.

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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 its investment in 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 $301.9 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. 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 aggregate purchase price of these acquisitions was approximately $437.0 million (inclusive of the $8.5 million previously-held equity method investment in Mina), net of cash of $117 million. The Company financed the acquisitions using a combination of available cash and borrowings under its existing credit facility. Any noncompete agreements signed in conjunction with these acquisitions were accounted for separately from the business acquisition.

Acquisition accounting is preliminary for PayByPhone as the Company is still completing the valuation for intangible assets, income taxes, working capital, and contingencies. Acquisition accounting for the other 2023 acquisitions was finalized during the first quarter of 2024 as the measurement period closed. There were no material measurement period adjustments recorded during the three and six months ended June 30, 2024.

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


Trade and other receivables	$	9,299
Prepaid expenses and other current assets	46,425
Other long term assets	13,302
Goodwill	383,851
Intangibles	158,689
Accounts payable	(25,238)
Other current liabilities	(132,132)
Other noncurrent liabilities	(18,923)
Aggregate purchase price	$	435,273

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

7. Goodwill and Other Intangibles

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


	December 31, 2023		Acquisitions1		Transferred to Held for Sale2		Acquisition Accounting Adjustments		Foreign Currency		June 30, 2024





Goodwill	$	5,644,958	$	81,064	$	(58,220)	$	1,058	$	(122,894)	$	5,545,966

1 Reflects the recognition of goodwill assigned to the Vehicle Payments segment related to the Zapay acquisition completed by the Company during the six months ended June 30, 2024.

2 Reflects the reclassification of goodwill within the Vehicle Payments segment to held for sale during the second quarter of 2024. See Note 15.

As of June 30, 2024 and December 31, 2023, other intangibles consisted of the following (in thousands):


		June 30, 2024						December 31, 2023
	Weighted- Avg Useful Lives (Years)	Gross Carrying Amounts		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amounts		Accumulated Amortization		Net Carrying Amount
Customer and vendor relationships	16.3	$	3,001,884	$	(1,561,013)	$	1,440,871	$	3,044,522	$	(1,511,173)	$	1,533,349
Trade names and trademarks—indefinite lived	N/A	423,982		—		423,982		440,900		—		440,900
Trade names and trademarks—other	2.0	50,338		(17,576)		32,762		51,510		(15,334)		36,176
Software	5.7	293,333		(244,132)		49,201		299,780		(238,819)		60,961
Non-compete agreements	4.2	81,921		(71,882)		10,039		85,111		(70,834)		14,277

Total other intangibles		$	3,851,458	$	(1,894,603)	$	1,956,855	$	3,921,823	$	(1,836,160)	$	2,085,663
N/A = Not Applicable

Changes in foreign exchange rates resulted in $36.9 million decrease to the net carrying values of other intangibles in the six months ended June 30, 2024. Amortization expense related to intangible assets for the six months ended June 30, 2024 and 2023 was $110.6 million and $113.3 million, respectively.

8. Debt

The Company is party to a $7.0 billion Credit Agreement (the "Credit Agreement"), with Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, and a syndicate of financial institutions (the "Lenders"), which has been amended multiple times. The Credit Agreement includes a term loan A, a term loan B, and a revolving credit facility. As noted in footnote 2, the Company is also party to the Securitization Facility.

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


	June 30, 2024		December 31, 2023
Term Loan A note payable, net of discounts	$	3,165,121	$	2,882,595
Term Loan B note payable, net of discounts	1,832,407		1,840,244
Revolving line of credit facilities	923,983		692,318
Other obligations	2,867		748



Total notes payable, credit agreements, and other obligations	5,924,378		5,415,905
Securitization Facility	1,409,000		1,307,000
Total debt	$	7,333,378	$	6,722,905
Current portion	$	2,515,744	$	2,126,749
Long-term portion	4,817,634		4,596,156
Total debt	$	7,333,378	$	6,722,905

The Company was in compliance with all financial and non-financial covenants under the Credit Agreement and Securitization Facility at June 30, 2024.

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The contractual maturities of the Company’s total notes payable, credit agreements and other obligations at June 30, 2024 were as follows (in thousands):


Remaining 2024	$	1,019,501
2025	185,250
2026	185,250
2027	2,774,312
2028	1,778,375
Thereafter	—
Total principal payments	5,942,688
Less: debt discounts and issuance costs included in debt	(18,310)
Total notes payable, credit agreements, and other obligations	$	5,924,378

9. Income Taxes

The Company's effective tax rate was 24.7% and 26.6% for the three months ended June 30, 2024 and 2023, respectively. Income tax expense is based on an estimated annual effective rate, which requires the Company to make its best estimate of annual pretax accounting income or loss before consideration of tax or benefit discretely recognized in the period in which such occur. Our effective income tax rate for the three months ended June 30, 2024 differs from the U.S. federal statutory rate due primarily to the unfavorable impact of state taxes net of federal benefits, additional taxes on undistributed foreign-sourced income, and foreign withholding taxes on interest income from intercompany notes. For the three months ended June 30, 2024, the effective tax rate decreased compared to the three months ended June 30, 2023 due to discrete items of $7.0 million mainly attributable to changes in estimates of state tax apportionment percentages for prior years.

10. Earnings Per Share

The Company reports basic and diluted earnings per share. Basic earnings per share is computed by dividing net income attributable to shareholders of the Company by the weighted average number of common shares outstanding during the reported period. Diluted earnings per share reflect the potential dilution related to equity-based incentives using the treasury stock method. The calculation and reconciliation of basic and diluted earnings per share attributable to Corpay for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands, except per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income attributable to Corpay	$	251,625	$	239,702	$	481,394	$	454,537
Denominator for basic earnings per share	70,107		73,887		70,934		73,705
Dilutive securities	1,390		1,114		1,582		1,058
Denominator for diluted earnings per share	71,497		75,001		72,516		74,763
Basic earnings per share attributable to Corpay	$	3.59	$	3.24	$	6.79	$	6.17
Diluted earnings per share attributable to Corpay	$	3.52	$	3.20	$	6.64	$	6.08

Diluted earnings per share attributable to Corpay for the three months ended June 30, 2024 and 2023 excludes the effect of 0.5 million and 2.2 million shares, respectively, of common stock that may be issued upon the exercise of employee stock options because such effect would be anti-dilutive. Diluted earnings per share attributable to Corpay also excludes the effect of an immaterial amount of performance-based restricted stock for which the performance criteria have not yet been achieved for the three month periods ended June 30, 2024 and 2023.

11. Segments

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

The Company’s segment results are as follows for the three and six month periods ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	20241		20232		2024		2023
Revenues, net:
Vehicle Payments	$	510,278	$	509,630	$	1,004,339	$	1,005,120
Corporate Payments	288,479		246,012		553,875		472,184
Lodging Payments	122,377		136,564		233,672		258,898
Other	54,576		55,968		119,075		113,305
	$	975,710	$	948,174	$	1,910,961	$	1,849,507
Operating income:
Vehicle Payments	$	242,025	$	232,506	$	467,720	$	455,986
Corporate Payments	120,556		95,708		225,267		176,090
Lodging Payments	56,391		68,246		103,668		122,809
Other	14,367		16,190		34,022		32,960
	$	433,339	$	412,650	$	830,677	$	787,845
Depreciation and amortization:
Vehicle Payments	$	49,765	$	51,926	$	100,087	$	102,276
Corporate Payments	20,698		17,779		41,501		37,939
Lodging Payments	11,965		11,661		23,595		23,059
Other	1,914		2,310		3,919		4,634
	$	84,342	$	83,676	$	169,102	$	167,908

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

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

12. Commitments and Contingencies

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

Derivative Lawsuits

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

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

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transferred to the Fulton County Metro Atlanta Business Case Division and consolidated as In re Corpay, Inc. Shareholder Derivative Litigation, CAFN 2023CV383303 (consolidated with CAFN 2023CV381421). On July 10, 2024, the defendants filed a motion to dismiss the consolidated lawsuit. The defendants dispute the allegations in the consolidated derivative action and intend to vigorously defend against the claims.

FTC Matter

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

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

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

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

13. Derivative Financial Instruments and Hedging Activities

Foreign Currency Derivatives

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

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

Forward contracts, which are commitments to buy or sell at a future date a currency at a contract price and will be settled in cash.
Option contracts, which give the purchaser the right, but not the obligation, to buy or sell within a specified time a currency at a contracted price that may be settled in cash.
Swap contracts, which are commitments to settlement in cash at a future date or dates, usually on an overnight basis.

The credit risk inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. Concentrations of credit and performance risk may exist with counterparties, which includes

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

The aggregate equivalent U.S. dollar notional amount of foreign exchange derivative customer contracts held by the Company was $69.6 billion and $56.6 billion as of June 30, 2024 and December 31, 2023. The majority of customer foreign exchange contracts are written in currencies such as the U.S. dollar, Canadian dollar, British pound, euro and Australian dollar.

The following table summarizes the fair value of derivatives reported in the Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 (in millions):


	June 30, 2024
	Fair Value, Gross				Fair Value, Net
	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Derivatives - undesignated:
Foreign exchange contracts	$	577.0	$	506.7	$	321.9	$	251.6


	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

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. At June 30, 2024 and December 31, 2023, the Company had received collateral of $33.4 million and $39.2 million, respectively. The customer has the right to recall their collateral in the event exposures move in their favor or below the collateral posting thresholds, 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. At June 30, 2024 and December 31, 2023, the Company had posted collateral of $295.5 million and $180.2 million, respectively, which was not offset against the fair value of its derivatives. Cash flows from the Company's foreign currency derivatives are classified as operating activities within the Unaudited Consolidated Statements of Cash Flows. The following table presents the fair value of the Company’s derivative assets and liabilities, as well as their classification on the accompanying Consolidated Balance Sheets, as of June 30, 2024 and December 31, 2023 (in millions):


		June 30, 2024		December 31, 2023
	Balance Sheet Classification	Fair Value

Derivative Assets	Prepaid expenses and other current assets	$	226.7	$	254.2
Derivative Assets	Other assets	$	95.2	$	66.0
Derivative Liabilities	Other current liabilities	$	162.1	$	190.4
Derivative Liabilities	Other noncurrent liabilities	$	89.5	$	54.3

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Cash Flow Hedges

During the six months ended June 30, 2024, the Company did not enter into any additional interest rate swaps. As of June 30, 2024, the Company had the following outstanding interest rate swap derivatives that qualify as hedging instruments within designated cash flow hedges of variable interest rate risk (in millions):


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

The purpose of these contracts is to reduce the variability of cash flows in interest payments associated with the Company's unspecified variable rate debt, the sole source of which is due to changes in the SOFR benchmark interest rate. The Company has designated these derivative instruments as cash flow hedging instruments, which are expected to be highly effective at offsetting changes in cash flows of the related underlying exposure. As a result, changes in fair value of the interest rate swaps are recorded in accumulated other comprehensive loss. For each of these swap contracts, the Company pays a fixed monthly rate and receives one month SOFR. The Company reclassified $25.2 million and $12.4 million from accumulated other comprehensive loss resulting in a benefit to interest expense, net for the six months ended June 30, 2024 and 2023, respectively, related to these interest rate swap contracts. Cash flows related to the Company's interest rate swap derivatives are classified as operating activities within the Unaudited Consolidated Statements of Cash Flows, as such cash flows relate to hedged interest payments recorded in operating activities.

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

The following table presents the fair value of the Company’s interest rate swap contracts, as well as their classification on the accompanying Consolidated Balance Sheets, as of June 30, 2024 and December 31, 2023 (in millions). See Note 3 for additional information on the fair value of the Company’s swap contracts.


		June 30, 2024		December 31, 2023
	Balance Sheet Classification	Fair Value
Derivatives designated as cash flow hedges:
Swap contracts	Prepaid expenses and other current assets	$	35.1	$	23.5
Swap contracts	Other assets	$	2.5	$	—

Swap contracts	Other noncurrent liabilities	$	10.4	$	55.8

As of June 30, 2024, the estimated net amount of the existing gains expected to be reclassified into earnings within the next 12 months is approximately $35.0 million.

Net Investment Hedges

The Company enters into cross-currency interest rate swaps that are designated as net investment hedges of our investments in foreign-denominated operations. Such contracts effectively convert the U.S. dollar equivalent notional amounts to obligations denominated in the respective foreign currency, and partially offset the impact of changes in currency rates on such foreign-denominated net investments. These contracts also create a positive interest differential on the U.S. dollar-denominated portion of the swaps, resulting in interest rate savings on the USD notional.

At June 30, 2024, the Company had the following cross-currency interest rate swaps designated as net investment hedges of our investments in foreign-denominated operations:


	U.S. dollar equivalent notional (in millions)	Fixed Rates	Maturity Date
Euro (EUR)	$500	1.85%	4/15/2027
Canadian Dollar (CAD)	$500	0.602%	5/7/2027
British Pound (GBP)	$750	0.317%	5/8/2028

Hedge effectiveness is tested based on changes in the fair value of the cross-currency swaps due to changes in the USD/foreign currency spot rates. The Company anticipates perfect effectiveness of the designated hedging relationships and records changes in the fair value of the cross-currency interest rate swaps associated with changes in the spot rate through accumulated other comprehensive loss. Excluded components associated with the forward differential are recognized directly in earnings as interest expense, net. The Company recognized a benefit of $5.1 million and $3.9 million in interest expense, net for the six months ended June 30, 2024 and 2023, respectively, related to these excluded components. Upon settlement, cash flows attributable to derivatives designated as net investment hedges are classified as investing activities in the Unaudited Consolidated Statements of Cash Flows.

The following table presents the fair value of the Company’s cross-currency interest rate swaps designated as net investment hedges, as well as their classification on the accompanying Consolidated Balance Sheets, as of June 30, 2024 and December 31, 2023 (in millions).


		June 30, 2024		December 31, 2023
	Balance Sheet Classification	Fair Value
Cross-currency interest rate swaps designated as net investment hedges:
Net investment hedge	Prepaid expenses and other current assets	$	14.9	$	—

Net investment hedge	Other current liabilities	$	—	$	14.5
Net investment hedge	Other noncurrent liabilities	$	27.4	$	—

14. Accumulated Other Comprehensive Loss (AOCL)

The changes in the components of AOCL, net of tax and noncontrolling interest, for the six months ended June 30, 2024 and 2023 are as follows (in thousands):


	June 30, 2024
	Cumulative Foreign Currency Translation		Unrealized Gains (Losses) on Derivative Instruments		Total Accumulated Other Comprehensive Loss Attributable to Corpay
Balance at December 31, 2023	$	(1,258,282)	$	(30,817)	$	(1,289,099)
Other comprehensive (loss) income before reclassifications	(254,705)		85,316		(169,389)
Amounts reclassified from AOCL	—		(25,238)		(25,238)
Tax effect	—		(15,259)		(15,259)
Other comprehensive (loss) income, net of tax	(254,705)		44,819		(209,886)
Balance at June 30, 2024	$	(1,512,987)	$	14,002	$	(1,498,985)

Other comprehensive loss attributable to the Company's noncontrolling interest, which are not included in the table above, for the six months ended June 30, 2024 consisted of foreign currency translation losses of $3.2 million.

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	June 30, 2023
	Cumulative Foreign Currency Translation		Unrealized (Losses) Gains on Derivative Instruments		Total Accumulated Other Comprehensive Loss Attributable to Corpay
Balance at December 31, 2022	$	(1,518,640)	$	8,990	$	(1,509,650)
Other comprehensive income before reclassifications	140,656		26,540		167,196
Amounts reclassified from AOCL	—		(12,392)		(12,392)
Tax effect	—		(2,417)		(2,417)
Other comprehensive income, net of tax	140,656		11,731		152,387
Balance at June 30, 2023	$	(1,377,984)	$	20,721	$	(1,357,263)

15. Assets Held for Sale

In May 2024, the Company signed a definitive agreement to sell certain non-core assets within the U.S. division of its Vehicle Payments segment (the "disposal group") to a third-party. The Company anticipates the transaction will close during the fourth quarter of 2024, subject to certain customary closing conditions. The Company determined that the disposal group met all of the required criteria to be classified as held for sale during the second quarter of 2024.

The disposal group's fair value, based upon the estimated sales price less anticipated costs to sell, exceeds its carrying value. As such, the related assets and liabilities were recorded at their carrying value. In determining the carrying value of the disposal group, which represents a portion of one of the Company's reporting units, goodwill of approximately $58.2 million was allocated to the disposal group based on a relative fair value analysis.

At June 30, 2024, the carrying value of the assets held for sale consists of current assets of approximately $20.4 million and goodwill of $58.2 million. The Company is in the process of estimating the impact of this transaction on its financial results, but expects to recognize a pre-tax gain on disposal.

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