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What changed in Corpay's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Corpay's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+464 added−418 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-28)

Top changes in Corpay's 2023 10-K

464 paragraphs added · 418 removed · 322 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

85 edited+29 added−10 removed88 unchanged
Biggest changeBank Voyager Fleet Systems, Edenred, Sodexo, Alelo, Radius Payment Solutions and DKV. • Our Lodging solutions compete with similar offerings from traditional travel management companies such as American Express Global Business Travel, as well as in-house travel solutions at large corporations and airlines. • Our Toll solutions compete with similar offerings from ConectCar (Banco Itaú and Ipiranga), Veloe (Alelo), and Repom (Edenred). • Our Corporate Payments solutions compete with similar offerings from financial institutions, American Express, Coupa, AvidXchange, Bill.com and Convera. • Our Gift and Payroll Card solutions compete with similar offerings from Fiserv, other special-purpose card issuers, and payroll companies.
Biggest changeOur parking solutions compete with similar offerings such as ParkMobile, ParkHub, Parking BOXX and FLASH. • Corporate Payments: Our corporate payments solutions compete with similar offerings from financial institutions, such as, American Express, Coupa, AvidXchange, Bill.com and Convera. • Lodging Payments: Our lodging solutions compete with similar offerings from traditional travel management companies such as, American Express Global Business Travel, as well as in-house travel solutions at large corporations and airlines. • Other; Our gift and payroll card solutions compete with similar offerings from Fiserv, other special-purpose card issuers, and payroll companies.
Payroll Card We offer a payroll card solution in North America in the form of a reloadable stored value card, that can be used instead of a paper payroll check. Our solution operates on the Mastercard payment network and the Allpoint ATM network, and the payroll cards are issued to our customers’ employees, and funded by the employees’ wages.
Payroll Card – We offer a Payroll Card solution in North America in the form of a reloadable stored value card, that can be used instead of a paper payroll check. Our solution operates on the Mastercard payment network and the Allpoint ATM network. The payroll cards are issued to our customers’ employees and funded by the employees’ wages.
Credit Underwriting and Collections We perform a detailed application review of all new applications for credit evaluating the applications for both fraud as well as credit risk. With both the fraud and credit review we leverage third-party data sources, including device data, fraud scores and credit bureau data to name a few.
Credit Underwriting and Collections We perform a detailed application review of all new applications for credit, evaluating the applications for fraud as well as credit risk. With both the fraud and credit review we leverage third-party data sources, including device data, fraud scores and credit bureau data to name a few.
We are also subject to the separate security breach notification laws of each of the 50 states, and the District of Columbia. Some of the non-U.S. data protection laws, including in the U.K., EU., and China, impose restrictions on the international transfer of personal data absent lawfully recognized transfer mechanisms or, in some cases, prohibit such transfer completely.
We are also subject to the separate security breach notification laws of each of the 50 states, and the District of Columbia. Some non-U.S. data protection laws, including in the U.K., EU., and China, impose restrictions on the international transfer of personal data absent lawfully recognized transfer mechanisms or, in some cases, prohibit such transfer completely.
In addition to delivering meaningful value to our customers, our solutions also share several important and attractive business model characteristics such as: • the majority of revenue is derived primarily from business customers, which tend to have relatively predictable, consistent volumes; • recurring revenue models driven by recurring volume, resulting in predictable revenue; • similar business-to-business (B2B) selling systems with common sales approaches, management and reporting; • specialized technology platforms and proprietary payment acceptance networks, which create competitive advantages and barriers to entry; and • high EBITDA margins and cash flow translation with limited infrastructure investment requirements.
In addition to delivering meaningful value to our customers, our solutions also share several important and attractive business model characteristics such as: • the majority of revenue is derived primarily from business customers, which tend to have relatively predictable, consistent volumes; • recurring revenue models driven by recurring volume, resulting in predictable revenue; • similar selling systems with common sales approaches, management and reporting; • specialized technology platforms and proprietary payment acceptance networks, which create competitive advantages and barriers to entry; and • high EBITDA margins and cash flow translation with limited infrastructure investment requirements.
See “Payment Card Industry Rules.” Email and Text Marketing Laws and Regulations We use direct email marketing and text-messaging to reach out to current or potential customers and therefore are subject to various statutes, regulations, and rulings, including the Telephone Consumer Protection Act (TCPA), the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM Act) and related Federal Communication Commission (FCC) orders.
See “Payment Card Industry Rules.” Email and Text Marketing Laws and Regulations We use email marketing and text-messaging to reach out to current or potential customers and therefore are subject to various statutes, regulations, and rulings, including the Telephone Consumer Protection Act (TCPA), the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM Act) and related Federal Communication Commission (FCC) orders.
It is important to note that we compete mostly with legacy payment methods and traditional ways of paying, such as cash and checks. We supplement our organic growth strategy and sales efforts by pursuing attractive acquisition opportunities, which serve to strengthen and extend our market positions and create value even faster.
It is important to note that we compete mostly with legacy payment methods and traditional ways of paying, such as cash and checks. We supplement our organic growth strategy and sales efforts by pursuing attractive acquisition opportunities, which serve to strengthen and extend our market positions and create value faster.
As we help our customers manage through the transition to EVs, many of them will operate mixed fleets for a long period of time, and will need access to all modalities of fueling, including networks of fuel stations, electric charging stations both on the road and at the office, in addition to at-home charging options.
As we help our customers manage through the transition to EVs, many will operate mixed fleets for a long period of time, and will need access to all modalities of fueling, including networks of fuel stations, electric charging stations both on the road and at the office, in addition to at-home charging options.
By automating the process of paying vendors, businesses of all sizes can reduce the time, costs and fraud risks associated with their payment processes, and focus more on operating their businesses. Virtual Card – Our Virtual Card solution provides a single-use card number for a specific amount, usable within a defined timeframe.
By automating the process of paying vendors, businesses of all sizes can reduce the time, costs and fraud risks associated with their payment processes, and focus on operating their businesses. Virtual Card – Our Virtual Card solution provides a single-use card number for a specific amount, usable within a defined timeframe.
These and similar laws and their related regulations restrict certain collection, processing, storage, use, and disclosure of personal information, require notice to individuals of privacy practices, and provide individuals with certain rights to prevent use and disclosure of protected information.
These and similar laws and their related regulations collectively restrict certain collection, processing, storage, use, and disclosure of personal information, require notice to individuals of privacy practices, and provide individuals with certain rights to prevent use and disclosure of protected information.
Lodging We offer Lodging solutions to businesses in North America, the U.K. and Germany that have employees who travel overnight for work purposes, to airlines and cruise lines globally to accommodate both their traveling crews and stranded passengers and to policyholders displaced from their homes due to damage or catastrophe on behalf of property insurance carriers.
We offer lodging solutions to businesses primarily in North America and the U.K. that have employees who travel overnight for work purposes, to airlines and cruise lines globally to accommodate both their traveling crews and stranded passengers and to policyholders displaced from their homes due to damage or catastrophe on behalf of property insurance carriers.
We conduct targeted strategies to minimize exposure to high-risk accounts, including reducing spending limits and payment terms or requiring additional security deposits. Competition Our primary competition is from financial institutions providing a full suite of financial products, including general purpose cards, AP payments (i.e. check and ACH), and FX solutions.
We conduct targeted strategies to minimize exposure to high-risk accounts, including reducing spending limits and payment terms or requiring additional security deposits. Competition Our primary competition is from financial institutions providing a full suite of financial products, including general purpose cards, AP payments (i.e. check and ACH), and foreign exchange (FX) solutions.
We maintain disaster recovery and business continuity plans, which benefited us during the COVID-19 pandemic and continue to benefit us. Our telecommunications and internet systems have multiple levels of redundancy to ensure the reliability of network service. In 2022, we achieved ove r 99.9% up- time for authorizations globally.
We maintain disaster recovery and business continuity plans, which benefited us during the COVID-19 pandemic and continue to benefit us. Our telecommunications and internet systems have multiple levels of redundancy to ensure the reliability of network service. In 2023, we achieved ove r 99.9% up- time for authorizations globally.
Many of our solutions also have additional capabilities, where we can enable the fuel card to allow customers to purchase a limited set of non-fuel items, such as oil, and vehicle maintenance supplies.
Many of our solutions also have additional capabilities, where we can enable the fuel card to allow customers to purchase a limited set of non-fuel items, such as oil, tolls, parking and vehicle maintenance supplies.
FLEETCOR’s vision is that every payment is digital, every purchase is controlled, and every related decision is informed. Our wide range of modern, digitized solutions generally provides control, reporting, and automation benefits superior to many of the payment methods businesses often use such as cash, paper checks, general purpose credit cards, as well as employee pay and reclaim processes.
FLEETCOR’s vision is that every payment is digital, every purchase is controlled, and every related decision is informed. Our wide range of modern, digitized solutions provide 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.
Our Tolls solution operates on our proprietary Sem Parar TM network, which processes transactions for more than 6.3 million tagholders on 100% of the toll roads that accept RFID across Brazil. We provide convenience and faster travel for customers, while also reducing manual labor and cash handling at merchants’ toll booths.
Our tolls solution primarily operates on our proprietary Sem Parar TM network, which processes transactions for more than 6.7 million tagholders on 100% of the toll roads that accept RFID across Brazil. We provide convenience and faster travel for customers, while also reducing manual labor and cash handling at merchants’ toll booths.
Vickery held a Senior Director position at Worldpay and spent more than nine years in public accounting at Deloitte LLP and Arthur Andersen LLP, as a senior manager in the audit and assurance practice. 15 Table of Contents
Vickery held a Senior Director position at Worldpay and spent more than nine years in public accounting at Deloitte LLP and Arthur Andersen LLP, as a senior manager in the audit and assurance practice. 16 Table of Contents
Our ERP integrations, application programming interface (API) capabilities, strategic vendor enrollment, and transaction management tools enable us to optimize our customers’ electronic payables programs. Our Virtual Card operates solely on the Mastercard network. Our customers’ ERP systems are directly integrated with our issuing system, and merchants must be enrolled in our proprietary vendor network to accept our Virtual Card solution.
Our ERP integrations, API capabilities, strategic vendor enrollment, and transaction management tools enable us to optimize our customers’ electronic payables programs. Our Virtual Card solution operates solely on the Mastercard network. Our customers’ ERP systems are directly integrated with our issuing system, and merchants must be enrolled in our proprietary vendor network to accept our Virtual Card solution.
As cardholders, the employees may present the payroll card as a form of payment for personal purchases, transfer funds to their bank account or withdraw funds from participating ATMs. Sales and Distribution We actively market and sell our solutions to current and prospective customers leveraging a multi-channel approach.
As cardholders, the employees may present the payroll card as a form of payment for personal purchases, transfer funds to their bank account or withdraw funds from participating ATMs. 8 Table of Contents Sales and Distribution We actively market and sell our solutions to current and prospective customers leveraging a multi-channel approach.
This two-sided transaction, where both payor and receiver are in our network, provides substantial payment security relative to paper checks or ACH. Cross-Border – Our Cross-Border solution is used by our customers to pay international vendors, foreign office and personnel expenses, capital expenditures, and profit repatriation and dividends.
This two-sided transaction, where both payor and receiver are in our network, provides substantial payment security relative to paper checks or ACH. Cross-Border – Our Cross-Border solution is used by our customers to pay international vendors, foreign office and personnel expenses and for profit repatriation and dividends.
Tolls Operated only in Brazil, we are the leading electronic toll payments provider to businesses and consumers in the form of radio frequency identification (RFID) tags affixed to vehicle windshields.
Tolls – Operated primarily in Brazil, we are the leading electronic toll payments provider to businesses and consumers in the form of radio frequency identification (RFID) tags affixed to vehicle windshields.
With respect to card products where we work with a partner or issuing bank, the partner bank may utilize the law of the jurisdiction applicable to the bank and “export” the usury limit of that state in connection with cards issued to residents of other states or we may use our choice of law provisions.
With respect to card products where we work with a partner 13 Table of Contents or issuing bank, the partner bank may utilize the law of the jurisdiction applicable to the bank and “export” the usury limit of that state in connection with cards issued to residents of other states or we may use our choice of law provisions.
Our Tolls solution also provides commercial customers with driver routing controls and fare auditing, mostly in the form of vehicle type and axle count configuration. Our tags may also be used at approximately 5,700 participating merchant locations to purchase goods and services while in the vehicle, such as parking, fuel, car washes, and meals at drive-through restaurants.
Our tolls solution also provides commercial customers with driver routing controls and fare auditing, mostly in the form of vehicle type and axle count configuration. Our tags may also be used at approximately 6,400 participating merchant locations to purchase goods and services while in the vehicle, such as parking, fuel, car washes, and meals at drive-through restaurants.
By utilizing transaction monitoring and watch list screening systems, we ensure payments are safe, secure, and meet all applicable regulatory requirements. 6 Table of Contents Purchasing and T&E Cards – We also offer purchasing cards and travel & entertainment (T&E) solutions to our customers. These solutions are generally sold in conjunction with our Virtual Card or AP Automation offerings.
By utilizing transaction monitoring and watch list screening systems, we ensure payments are safe, secure, and meet all applicable regulatory requirements. Purchasing and T&E Cards – We also offer purchasing cards and travel & entertainment (T&E) solutions to our customers. These solutions are generally sold in conjunction with our Virtual Card or AP Automation offerings.
A breach 11 Table of Contents of such payment card network rules could subject us to a variety of fines or penalties that may be levied by the payment networks for certain acts or omissions. The payment networks routinely update and modify their requirements.
A breach of such payment card network rules could subject us to a variety of fines or penalties that may be levied by the payment networks for certain acts or omissions. The payment networks routinely update and modify their requirements.
State Usury Laws Extensions of credit under many of our card products may be treated as commercial loans. In some states, usury laws limit the interest rates that can be charged not only on consumer loans but on commercial loans as well.
State Usury Laws Extensions of credit under many of our card products may be treated as commercial loans and may require state licensing. In some states, usury laws limit the interest rates that can be charged not only on consumer loans but on commercial loans as well.
The Fair Credit Reporting Act (FCRA) regulates consumer reporting agencies and the disclosure and use of consumer reports. We obtain consumer reports with respect to an individual who guarantees or otherwise is obligated on a 10 Table of Contents commercial card.
The Fair Credit Reporting Act (FCRA) regulates consumer reporting agencies and the disclosure and use of consumer reports. We obtain consumer reports with respect to an individual who guarantees or otherwise is obligated on a commercial card.
These proprietary networks also provide us with advantageous economics by providing attractive, captive spend to the merchant base. • Scalable Technology – Our easy-to-use platforms provide control and functionality for our customers, and we can on-board incremental customer volume with very limited need for additional infrastructure.
These proprietary networks also provide us with advantageous economics by providing attractive, captive spend to the merchant base. 9 Table of Contents • Scalable Technology – Our easy-to-use platforms provide control and functionality for our customers, and we can on-board incremental customer volume with very limited need for additional infrastructure.
Our values, 12 Table of Contents listed below, are infused in all aspects of FLEETCOR, and guide our employee selection, behavior and interactions with both internal and external stakeholders: • Innovation – figure out a better way • Execution – get it done quickly • Integrity – do the right thing • People – we make the difference • Collaboration – accomplish more together Diversity, Inclusion and Belonging O ur focus on diversity, inclusion and belonging (DIB) is part of our successful “One FLEETCOR” culture.
Our values, listed below, are infused in all aspects of FLEETCOR, and guide our employee selection, behavior and interactions with both internal and external stakeholders: • Innovation – figure out a better way • Execution – get it done; outputs matter • Integrity – do the right thing • People – we make the difference • Collaboration – accomplish more together Diversity, Inclusion and Belonging O ur focus on diversity, inclusion and belonging (DIB) is part of our successful “One FLEETCOR” culture.
In many instances, they lack the proper tools to monitor what is being purchased, and employ manual, paper-based, disparate processes and methods to both approve and make payments for their purchases.
In many instances, businesses lack the proper tools to monitor what is being purchased, and employ manual, paper-based, disparate processes and methods to both approve and make payments for their business-to-business purchases.
Clarke served as Chief Marketing Officer and later as a Division President with Automatic Data Processing, Inc., a computer services company. From 1987 to 1990, Mr. Clarke was a Principal with Booz Allen Hamilton, a global management consulting firm. Earlier in his career, Mr.
Clarke served as Chief Marketing Officer and later as a Division President with Automatic Data Processing, Inc., a human resources software and services company. From 1987 to 1990, Mr. Clarke was a Principal with Booz Allen Hamilton, a global management consulting firm. Earlier in his career, Mr.
With a long, proven operating history, FLEETCOR now serves hundreds of thousands of business customers with millions of cardholders making payments to millions of vendors around the world. FLEETCOR has the following reportable segments: Fleet, Corporate Payments, Lodging, Brazil and Other.
With a long, proven operating history, FLEETCOR now serves hundreds of thousands of customers with millions of cardholders making payments to millions of vendors around the world. FLEETCOR has the following reportable segments: Vehicle Payments, Corporate Payments, Lodging Payments and Other.
At the most basic level, we provide the measurement of fuel used and facilitate the payment for that fuel to the merchant, whether that fuel be diesel, gasoline, compressed natural gas, or electricity, while also providing online control, reporting and tracking capabilities to fleet operators. Our solutions are fuel type agnostic.
At the most basic level, we provide the measurement of fuel used and facilitate the payment for that fuel to the merchant, whether that fuel be diesel, gasoline, compressed natural gas, or electricity, while also providing online control, reporting and tracking capabilities to fleet operators.
Because we want our employees and their families to thrive, in additional to our regular benefit offerings, we focused on physical and mental well-being in 2022. During the year, we offered free, online fitness classes, sponsored the FLEETCOR Wellbeing Challenge, provided access to employee assistance programs in all regions, and celebrated Mental Health Awareness programs globally.
Because we want our employees and their families to thrive, in additional to our regular benefit offerings, we focused on physical and mental well-being in 2023. During the year, we offered free, online fitness classes, sponsored the FLEETCOR Wellbeing 14 Table of Contents Challenge, provided access to employee assistance programs in all regions, and celebrated Mental Health Awareness programs globally.
Our systems align with industry standards for security, with multiple industry certifications. Our network is configured with multiple layers of security to isolate our core systems from unauthorized access. We use secure communication among applications, and our employees access critical components strictly on a "need-to-know" basis.
Our network is configured with multiple layers of security to isolate our core systems from unauthorized access. We use secure communication among applications, and our employees access critical components strictly on a "need-to-know" basis.
The Federal Reserve has capped debit interchange fees, however the cap has not had a material direct impact on our results of operations because we operate under an exemption to the cap for the majority of our debit transactions.
The Federal Reserve has capped debit interchange fees and may reduce the cap in the future, however the cap has not had a material direct impact on our results of operations because we operate under an exemption to the cap for the majority of our debit transactions.
Netto held various leadership roles with Unisys and McKinsey, where he gained international experience in Europe supporting clients in the U.K., France, Austria, Portugal, and the Netherlands. Alissa B. Vickery has been our interim Chief Financial Officer since October 2022 and our Chief Accounting Officer since September 2020. Mrs.
Netto held various leadership roles with Unisys and McKinsey, where he gained international experience in Europe supporting clients in the U.K., France, Austria, Portugal, and the Netherlands. Alissa B. Vickery has been our Chief Accounting Officer since September 2020 and also served as our interim Chief Financial Officer from October 2022 through May 2023. Mrs.
We offer a proprietary trading and payments platform that we can "white label" for financial institutions looking to expand their cross-border payment capability, as well as a suite of API products that enables us to embed our full capability directly within the technology of both customers and partners.
Our customers rely on us to deliver personalized service and customer solutions. We offer a proprietary trading and payments platform that we can "white label" for financial institutions looking to expand their cross-border payment capability, as well as a suite of API products that enables us to embed our full capability directly within the technology of both customers and partners.
Anti-Money Laundering, Counter Terrorist, and Sanctions Regulations The Currency and Foreign Transactions Reporting Act, which is also known as the Bank Secrecy Act (BSA) and which has been amended by the USA PATRIOT Act of 2001, contains a variety of provisions aimed at fighting terrorism and money laundering. Among other things, the BSA and related regulations issued by the U.S.
Anti-Money Laundering, Counter Terrorist, and Sanctions Regulations The Currency and Foreign Transactions Reporting Act, which is also known as the Bank Secrecy Act (BSA) and which has been amended by the USA PATRIOT Act of 2001, contains a variety of provisions aimed at fighting terrorism and money laundering.
Vickery 45 Interim Chief Financial Officer and Chief Accounting Officer Ronald F. Clarke has been our Chief Executive Officer since August 2000 and was appointed Chairman of our Board of Directors in March 2003. From 1999 to 2000, Mr. Clarke served as President and Chief Operating Officer of AHL Services, Inc., a staffing firm. From 1990 to 1998, Mr.
Clarke has been our Chief Executive Officer since August 2000 and was appointed Chairman of our Board of Directors in March 2003. From 1999 to 2000, Mr. Clarke served as President and Chief Operating Officer of AHL Services, Inc., a staffing firm. From 1990 to 1998, Mr.
In addition to economic sanctions programs, we are also subject to a number of international laws and regulations focused on fighting terrorism and money laundering, including primarily: • in Canada, Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA); • in Australia, as a registered remittance dealer with AUSTRAC, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act); • in the U.K., as a registered Electronic Money Institution with the Financial Conduct Authority, the Proceeds of Crime Act, 2002, and the Terrorism Act 2000; • in Ireland, the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended by Part 2 of the Criminal Justice Act 2013 and by the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018; and • in the EU, AML requirements promulgated under the 4th, 5th and 6th EU Anti-Money Laundering Directives.
In addition to economic sanctions programs, we are also subject to a number of international laws and regulations focused on fighting terrorism and money laundering, including primarily: • in Canada, Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA); • in Australia, as a registered remittance dealer with AUSTRAC, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act); • in the U.K., as a registered Electronic Money Institution with the Financial Conduct Authority, the Proceeds of Crime Act, 2002, and the Terrorism Act 2000; • in Ireland, the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended by Part 2 of the Criminal Justice Act 2013 and by the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018; and • in the EU, AML requirements promulgated under the 4th, 5th and 6th EU Anti-Money Laundering Directives. 12 Table of Contents Numerous other countries have also enacted or proposed new or enhanced AML legislation and regulations applicable to us.
Additionally, we will likely be subject to new and evolving data privacy laws in the U.S. and abroad, which could result in additional costs of compliance, enforcement actions, regulatory fines, litigation, or reputational harm.
Going forward, we will likely be subject to new and evolving data privacy laws in the U.S. and abroad, which could result in additional costs of compliance, enforcement actions, regulatory investigations and fines, individual or class action litigation, or reputational harm.
Vickery joined FLEETCOR in 2011 and served as Senior Vice President of Accounting and Controls, with oversight of external reporting, technical accounting and internal audit. Prior to joining us, Mrs.
Vickery joined FLEETCOR in 2011 and served as Senior Vice President of Accounting and Controls, with oversight of external reporting, technical accounting and internal audit until her appointment as interim Chief Financial Officer. Prior to joining us, Mrs.
We recognize the importance of state-of-the-art, secure, efficient, and reliable technology in our business and have made significant investments in our applications and infrastructure. In 2022, we spent appro ximately $324 million in capital a nd operating expenses to operate, protect, and enhance our technology.
We recognize the importance of state-of-the-art, secure, efficient, and reliable technology in our business and have made significant investments in our applications and infrastructure. In 2023, we spent appro ximat ely $370 million i n capital a nd operating expenses to operate, protect, and enhance our technology.
We may have responsibility to the card networks, financial institutions, and in some instances, our customers, and/or individuals, for our failure or the failure of our associated third parties (as applicable) to protect this information.
We may have responsibility to the card networks, financial institutions, and in some instances, our customers, and/or individuals, for our failure or the failure of our associated third parties (as applicable) to protect this information. Our systems align with industry standards for security, with multiple industry certifications.
As of December 31, 2022, females represented approximately 53% of our global workforce and approximately 24% of our senior leadership team, while minorities comprised approximately 34% of our domestic workforce and approximately 12% of our senior leadership team. Fostering a culturally diverse and inclusive environment and creating a true sense of belonging are among our top priorities.
As of December 31, 2023, females represented approximately 52% of our global workforce and approximately 17% of our senior leadership team, while minorities comprised approximately 36% of our domestic workforce and approximately 17% of our senior leadership team. Fostering a culturally diverse and inclusive environment and creating a true sense of belonging are among our top priorities.
The Voice of the Employee We continue to develop a nd refine our people programs based on feedback we receive directly from our workforce, which we gather through a survey of all employees globally. The participation rate for our 2021 survey was approximately 75%. Our employee engagement score in 2021 remained consistent (1 point lower) than our 2020 results.
The Voice of the Employee We continue to develop a nd refine our people programs based on feedback we receive directly from our workforce, which we gather through a survey of all employees globally . The participation rate for our 2023 survey was approximately 70%. Our employee engagement score in 2023 remained consistent with previous years’ results.
Through the use of cloud technology and microservices, we are able to modernize our platforms with no disruption to our customers. Finally, data is becoming an ever-increasing part of how the Company and its customers do business.
Additionally, as we develop new solutions and modernize legacy assets, we increasingly leverage cloud services. Through the use of cloud technology and microservices, we are able to modernize our platforms with no disruption to our customers. Finally, data is becoming an ever-increasing part of how the Company and its customers do business.
Human Capital As of December 31, 2022, FLEETCOR employed approxima tely 9,900 associates located in more than 18 countries a round the world, with approximately 4,100 of those associates based in the U.S. At FLEETCOR, we strongly believe that talent is a strong determinant of the Company’s performance and success.
Human Capital As of December 31, 2023, FLEETCOR employed approximately 10,500 associates located in more than 21 countries around the world, with approximately 4,100 of those associates based in the U.S. At FLEETCOR, we strongly believe that talent is a strong determinant of the Company’s performance and success.
Considering the increased complexity of managing a mixed fleet or an all EV fleet, our product sets are positioned to remain valuable and capture transaction economics, regardless of the vehicle type or propulsion method. We utilize both proprietary and third-party networks to deliver our Fuel solutions.
Considering the increased complexity of managing a mixed or an all EV fleet, our product sets are positioned to remain valuable and capture transaction economics, regardless of the vehicle type or propulsion method.
We make available on or through our website certain reports and amendments to those reports that we file with or furnish the SEC in accordance with the Securities and Exchange Act of 1934, as amended (Exchange Act).
We make available on or through our website certain reports and amendments to those reports that we file with or furnish the SEC in accordance with the Securities and Exchange Act of 1934, as amended (Exchange Act). These include our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K.
We utilize both proprietary and third-party payment acceptance networks to deliver our Vehicle and Mobility 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.
In our proprietary networks, which tend to be geographically distinct and unique to the markets we serve, 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.
See “Anti-Money Laundering, Counter Terrorist, and Sanctions Regulations.” 9 Table of Contents Government agencies may impose new or additional requirements on money transmission and sales of payment instruments, and we expect that compliance costs will increase in the future for our regulated subsidiaries.
Additionally, government agencies may impose new or additional requirements on money transmission and sales of payment instruments. We expect that compliance costs will increase in the future for our regulated subsidiaries.
We use proprietary data management and payment processing systems to manage customer billings and reports, which, combined with our discounted hotel network, provide customers with potential savings and increased visibility into their lodging costs. The integration of our processing systems with airline logistics and crew management systems enables us to deliver enhanced services to the travel industry vertical.
We use proprietary data management and payment processing systems to manage customer billings and reports, which, combined with our discounted hotel network, provide customers with potential savings and increased visibility into their lodging costs.
Treasury Department require financial-services providers to establish AML programs, to not engage in terrorist financing, to report suspicious activity, and to maintain a number of related records. We are also subject to certain economic and trade sanctions programs that are administered by the U.S.
Among other things, the BSA and related regulations issued by FinCEN require financial-services providers to establish AML programs, to prohibit the financing of terrorism, to report suspicious activity, and to maintain a number of related records. We are also subject to certain economic and trade sanctions programs that are administered by the U.S.
In addition, some restrict the ability to collect and utilize certain types of information such as Social Security and driver’s license numbers. The regulations and rules are complex and evolving, and can provide for significant penalties for non-compliance. Certain of our products that access payment networks require compliance with Payment Card Industry (PCI) data security standards.
In addition, some restrict the ability to collect and utilize certain types of information such as Social Security and driver’s license numbers. These laws and regulations are complex and evolving, and can provide for significant penalties for non-compliance.
We also offer hedging and risk management services to customers, which helps them manage the impact of volatile exchange rates in the course of doing business internationally. This solution is often sold in conjunction with our AP Automation and Virtual Card solutions.
We also offer hedging and risk management services to customers, which helps them manage the impact of volatile exchange rates in the course of doing business internationally.
Money Transmission and Payment Instrument Licensing Regulations We are subject to various U.S. laws and regulations governing money transmission and the issuance and sale of payment instruments relating to certain aspects of our business. In the U.S., most states license money transmitters and issuers of payment instruments. Through our subsidiaries, we are licensed in all states where required for business.
In the U.S., most states license money transmitters and issuers of payment instruments. Through our subsidiaries, we are licensed in all states where required for business.
Many states also require money transmitters and issuers of payment instruments to comply with federal and state anti-money laundering laws (AML) and regulations.
Many states as well as the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (FinCEN) also require money transmitters and issuers of payment instruments to comply with federal and state anti-money laundering laws (AML) and regulations.
In October 2020, FLEETCOR published its inaugural Corporate Responsibility & Sustainability Report (CRS Report), in which we provided detailed information about the Company’s views and approaches regarding environmental, social and governance issues.
Throughout 2023, we conducted several additional pulse surveys and focus groups to assess the ongoing engagement of our workforce. In October 2020, FLEETCOR published its inaugural Corporate Responsibility & Sustainability Report (CRS Report), in which we provided detailed information about the Company’s views and approaches regarding environmental, social and governance issues.
Additionally, we provide technology, which combines and leverages transaction data captured from our virtual, purchasing, and T&E card products, to help our customers analyze and manage their corporate spending. Additional Solutions FLEETCOR provides other payments solutions that due to their nature are not considered within our Vehicle and Mobility or Corporate Payments solutions.
Additionally, we provide technology, which combines and leverages transaction data captured from our virtual, purchasing, and T&E card products, to help our customers analyze and manage their corporate spending.
Trade settlement and payment delivery is facilitated through a global network of correspondent banks, in-country payment gateways and technology providers, enabling us to send payments to recipients in over 200 countries and 145 currencies. Our customers rely on us to deliver personalized service and customer solutions, with a heavy focus on technology.
This solution may be sold in conjunction with our AP Automation and Virtual Card solutions. 7 Table of Contents Trade settlement and payment delivery is facilitated through a global network of correspondent banks, in-country payment gateways and technology providers, enabling us to send payments to recipients in over 200 countries and 145 currencies.
In addition, the legal and regulatory framework governing our business is subject to ongoing revision, and changes in that framework could have a significant effect on us.
In addition, the legal and regulatory framework governing our business is subject to ongoing revision, and changes in that framework could have a significant effect on us. Money Transmission and Payment Instrument Licensing Regulations We are subject to various U.S. laws and regulations governing money transmission and the issuance and sale of payment instruments.
At merchant locations, payment via electronic tags is faster, safer and more secure for customers, which in turn increases loyalty and throughput for merchants and eliminates the handling of cash. 5 Table of Contents Other Fleet Maintenance – We provide a vehicle maintenance service solution that helps fleet customers to manage their vehicle maintenance, service, and repair needs in the U.K.
At merchant locations, payment via electronic 6 Table of Contents tags is faster, safer and more secure for customers, which in turn increases loyalty and throughput for merchants and eliminates the handling of cash.
We also provide program management services to major oil companies, leasing companies and fuel marketers, which allow these partners to outsource the sales, marketing, credit, service, and system operations of their branded fuel card portfolios. Our fuel partners include British Petroleum (BP), Arco, Speedway, Casey's and over 640 fuel marketers of all sizes.
We are actively expanding our EV footprint to accommodate charging in the U.S., U.K. and Europe. We also provide program management services to major oil companies, leasing companies and fuel marketers, which allow these partners to outsource the sales, marketing, credit, service, and system operations of their branded fuel card portfolios.
From physical payment cards to software that includes customizable controls and robust payment capabilities, we provide businesses 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. Businesses spend an estimated $135 trillion each year with other businesses.
FLEETCOR has been a member of the S&P 500 since 2018 and trades on the New York Stock Exchange under the ticker FLT. We expect to rebrand FLEETCOR to Corpay, Inc. in March 2024, including changing our New York Stock Exchange ticker from FLT to CPAY. Businesses spend an estimated $135 trillion each year in transactions with other businesses.
Our Vehicle and Mobility solutions help control and monitor employee spending while in the field or in a vehicle and include fuel, lodging, tolls and other complementary products. Our Corporate Payments solutions simplify and automate vendor payments and include accounts payable (AP) automation, virtual cards, cross-border, and purchasing and travel and entertainment (T&E) card products.
Our Corporate Payments solutions simplify and automate vendor payments and include accounts payable (AP) automation, virtual cards, cross-border, and purchasing and travel and entertainment (T&E) card products.
We utilize both proprietary and third-party networks where we provide access to deeply discounted hotel rooms with enhanced controls and reporting, and audit and tax management services.
We utilize both proprietary and third-party networks where we provide access to deeply discounted hotel rooms with streamlined travel management programs, providing enhanced controls and reporting, audit and tax management services. We also can secure hotel rooms outside our proprietary networks in each of our solutions, or private homes in our insurance vertical.
Additionally, we are investing in modernizing our core transactional systems to make them more resilient, secure, and scalable. Our technology infrastructure is supported by highly-secure data centers, with redundant locations.
Additionally, we are investing in modernizing our core transactional systems to make them more resilient, secure, and scalable. Our technology infrastructure is supported by highly-secure data centers, with redundant locations. We operate our primary data centers, located in Atlanta, Georgia; Studley, United Kingdom; Prague, Czech Republic; Las Vegas, Nevada; Lexington and Louisville, Kentucky; São Paulo, Brazil; and Toronto, Canada.
In addition, the SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically at https://www.sec.gov. 14 Table of Contents ITEM X. EXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth certain information regarding our executive officers, with their respective ages as of December 31, 2022.
We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. In addition, the SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically at https://www.sec.gov. 15 Table of Contents ITEM X.
Regulatory A substantial number of laws and regulations, both in the U.S. and in other jurisdictions, apply to businesses offering payment products to customers, processing payments and servicing related accounts, or operating payment networks. These laws and regulations are often evolving and sometimes ambiguous or inconsistent, and the extent to which they apply to us is at times unclear.
Also, see Item 1C Cybersecurity for further discussion of the Company's risk management strategy and governance. 10 Table of Contents Regulatory A substantial number of laws and regulations, both in the U.S. and in other jurisdictions, apply to businesses offering payment products to customers, processing payments and servicing related accounts, or operating payment networks.
We also compete with specialized competitive offerings from other companies that vary by product solution. 7 Table of Contents • Our Fuel solutions compete with similar offerings from WEX, U.S.
We also compete with specialized competitive offerings from other companies that vary by product solution. • Vehicle Payments: Our fuel solutions compete with similar offerings such as, WEX, U.S. Bank Voyager Fleet Systems, Edenred, Sodexo, Alelo, Radius Payment Solutions and DKV. Our toll solutions compete with similar offerings such as, ConectCar, Veloe (Alelo), and Repom (Edenred).
We continue to share the detailed engagement scores across the organization, and analyze the results to understand differences by geography, demographics, job level, and leader, and to identify opportunities for further improvement. Throughout 2022, we conducted several additional pulse surveys to assess the ongoing engagement of our workforce. We are preparing to launch our 2023 survey in the coming months.
We believe our employee propositi on remains strong and we continue to attract and retain top talent. We continue to share the detailed engagement scores across the organization, and analyze the results to understand differences by geography, demographics, job level, and leader, and to identify opportunities for further improvement.
Vehicle and Mobility Solutions Our Vehicle and Mobility solutions are purpose-built to enable our business and consumer customers to pay for vehicle and mobility-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.
For our business customers, we also provide greater control and visibility of spending when compared with less specialized payment methods, such as cash or general-purpose credit cards. Our digital enabled solutions provide customers with significant control capabilities such as, customizable user-level controls, programmable alerts, and detailed transaction reporting.
Clarke was a marketing manager for General Electric Company, a diversified technology, media, and financial services corporation. Alan King has served as our Group President of Global Fleet since May 2022. Mr. King joined FLEETCOR in August 2016 and served as our President - U.K., Australia, and New Zealand, based in London, until June 2019.
King joined FLEETCOR in August 2016 and served as our President - U.K., Australia, and New Zealand, based in London, until June 2019. From July 2019 to April 2022, Mr. King was Group President of Europe, Australia, and New Zealand Fuel. Prior to joining us, Mr.
King held the roles of Group Head, Global Prepaid Solutions, Group General Manager for Market and Business Development in the U.K. & Ireland, and General Manager, Global Accounts. Prior to Mastercard, Mr. King held leadership positions at VISA in the CEMEA region from 2003 to 2005 and at Citibank from 1998 to 2003, largely across commercial payments in international markets.
King worked at Mastercard where he was most recently Managing Director, MasterCard Prepaid Management Services. During his 11 year career at Mastercard, Mr. King held the roles of Group Head, Global Prepaid Solutions, Group General Manager for Market and Business Development in the U.K. & Ireland, and General Manager, Global Accounts. Prior to Mastercard, Mr.
We report these segments as they reflect how we organize and manage our global employee base, manage operating performance, and contemplate the differing regulatory environments across geographies and solutions. To help facilitate an understanding of our expansive range of solutions around the world, we describe them in two solution driven categories: Vehicle and Mobility solutions and Corporate Payments solutions.
We report these segments as they 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 help control and monitor employee spending while in the field or in a vehicle and include fuel, tolls and other complementary products.
Mastercard and VISA are our primary third-party network partners in North America and Europe, respectively. Fuel We offer Fuel solutions to businesses and government entities who operate vehicle fleets.
We offer fuel solutions to businesses and government entities who operate vehicle fleets, as well as to consumers primarily in Brazil, Mexico and Europe.
This solution is provided through our proprietary maintenance and repair network, which processes transactions for fleet customers at over 9,200 service centers across the U.K. We also offer compliance service to the U.K.’s heavy goods (truck) operators, workshops and drivers.
This solution is provided through our proprietary maintenance and repair network, which, in the U.K., processes transactions for fleet customers at over 9,000 service centers. The same platform also provides leasing companies with the capability to manage the re-marketing of leased vehicles and any ad-hoc vehicle rental needs.
Numerous other countries have also enacted or proposed new or enhanced AML legislation and regulations applicable to us. Non-banks that provide certain financial services are required to register with the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (FinCEN) as “money services businesses” (MSB). Through certain subsidiaries, we are registered as MSBs.
Non-banks that provide certain financial services are required to register with FinCEN as “money services businesses” (MSB). Certain of our subsidiaries are registered as MSBs.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome derivative types are only available to be traded as non-centrally cleared OTC. In other cases, exchange-traded equivalents are less liquid or less cost-effective in gaining or hedging certain market exposures. Further, OTC derivatives offer investors more flexibility in structure because, unlike the standardized cleared products, they can be tailored or customized to fit specific needs or investment goals.
Biggest changeOver-the-counter (OTC) derivatives are a core product offered by the Cross-Border business. Non-centrally cleared OTC derivatives can have certain advantages over exchange-traded and centrally cleared derivatives. Some derivative types are only available to be traded as non-centrally cleared OTC. In other cases, exchange-traded equivalents are less liquid or less cost-effective in gaining or hedging certain market exposures.
In order to remain competitive, we are continually involved in a number of projects, including the development of new platforms, mobile payment applications, e-commerce services and other new offerings emerging in the payments technology industry, including particularly with respect to EVs. These projects carry the risks associated with any development effort, including cost overruns, delays in delivery and performance problems.
In order to remain competitive, we are continually involved in a number of projects, including the development of new platforms, mobile payment applications, e-commerce services and other new offerings emerging in the payments technology industry, including with respect to EVs. These projects carry the risks associated with any development effort, including cost overruns, delays in delivery and performance problems.
Similarly, prolonged adverse weather events, travel bans due to medical quarantine (such as the recent responses to the COVID-19 pandemic) or in response to natural catastrophes, especially those that impact regions in which we process a large number and amount of payment transactions, could adversely affect our transaction volumes.
Similarly, prolonged adverse weather events, travel bans due to medical quarantine (such as the responses to the COVID-19 pandemic) or in response to natural catastrophes, especially those that impact regions in which we process a large number and amount of payment transactions, could adversely affect our transaction volumes.
Under certain circumstances, when we fund customer transactions, we may bear the risk of substantial losses due to fraudulent use of our payment solutions. We do not maintain insurance to protect us against such losses. We bear similar risk relating to fraudulent acts of employees or contractors, for which we maintain insurance.
Under certain circumstances, when we fund customer transactions, we may bear the risk of substantial losses due to fraudulent use of our payment solutions. We do not maintain insurance to protect us against all of such losses. We bear similar risk relating to fraudulent acts of employees or contractors, for which we maintain insurance.
Some of the countries where we operate, and other countries where we will seek to operate, such as Russia, Brazil and Mexico, have undergone significant political, economic and social change in recent years, and the risk of unforeseen changes in these countries may be greater than in the U.S.
Some of the countries where we operate, and other countries where we will seek to operate, such as Brazil and Mexico, have undergone significant political, economic and social change in recent years, and the risk of unforeseen changes in these countries may be greater than in the U.S.
Any alleged or actual failure to comply with these measures may subject us to government scrutiny, civil or criminal proceedings, sanctions, and other liabilities, which may have a material and adverse effect on our operations, financial condition, and results of operations.
Any alleged or actual failure to comply with these measures may subject us to government scrutiny, civil or criminal proceedings, sanctions, and other liabilities, which may have a material and adverse effect on our business, financial condition, and results of operations.
Corporate Payments solutions faces a variety of competitors, some of which have greater financial resources, name recognition and scope and breadth of products and services. Competitors in the Lodging solution include travel agencies, online lodging discounters, internal corporate procurement and travel resources, and independent services companies.
Corporate Payments solutions faces a variety of competitors, some of which have greater financial resources, name recognition and scope and breadth of products and services. Competitors in the Lodging solutions include travel agencies, online lodging discounters, internal corporate procurement and travel resources, and independent services companies.
In addition, we regularly engage in significant efforts to upgrade our products, services and underlying technology, which may or may not be successful in achieving broad acceptance or their intended purposes. 17 Table of Contents The solutions we deliver are designed to process complex transactions and provide reports and other information on those transactions, all at high volumes and processing speeds.
In addition, we regularly engage in significant efforts to upgrade our products, services and underlying technology, which may or may not be successful in achieving broad acceptance or their intended purposes. 18 Table of Contents The solutions we deliver are designed to process complex transactions and provide reports and other information on those transactions, all at high volumes and processing speeds.
In addition, interchange fees are the subject of intense legal and regulatory scrutiny and competitive pressures in the electronic payments industry, which could result in lower interchange fees generally in the future.
In addition, interchange fees are the subject of intense legal, political and regulatory scrutiny and competitive pressures in the electronic payments industry, which could result in lower interchange fees generally in the future.
In addition, changes in laws or regulations, including with respect to payment service providers, taxation, information technology, data transmission and the Internet, revenues from non-U.S. operations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise, could materially adversely affect our portfolio, operating results and financial condition.
In addition, changes in laws or regulations, including with respect to payment service providers, taxation, information technology, data transmission and the internet, revenues from non-U.S. operations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise, could materially adversely affect our business, operating results and financial condition.
Further, we may not be able to successfully execute our EV strategy, which could further adversely impact our business. In addition, our transaction volumes could be adversely affected if businesses do not continue to use, or fail to increase their use of, credit, debit or stored value cards as a payment mechanism for their transactions.
Further, we may not be able to successfully execute our EV strategy, which could further adversely impact our business. In addition, our transaction volumes could be adversely affected if businesses do not continue to use, or fail to increase their use of, credit, debit, ACH, virtual cards or stored value cards as a payment mechanism for their transactions.
Any factors that increase the cost of cross-border trade for us or our customers or that restrict, delay, or make cross-border trade more difficult or impractical, such as trade policy (including restrictions arising out of the Russian and Ukrainian conflict) or higher tariffs, could negatively impact our revenues and harm our business.
Any factors that increase the cost of cross-border trade for us or our customers or that restrict, delay, or make cross-border trade more difficult or impractical, such as trade policy (including restrictions arising out of the Russian and Ukrainian conflict or the Middle East conflict) or higher tariffs, could negatively impact our revenues and harm our business.
Our business in foreign countries may be adversely affected by operational and political risks that are greater than in the U.S. We have foreign operations in, or provide services for customers in mor e than 165 countries thro ughout North America, South America, Europe, Africa, Oceania and Asia.
Our business in foreign countries may be adversely affected by operational and political risks that are greater than in the U.S. We have foreign operations in, or provide services for customers in mor e than 150 countries thro ughout North America, South America, Europe, Africa, Oceania and Asia.
The fuel price that we charge to any Fuel 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. The significant volatility in fuel prices can impact these revenues by lowering total fuel transaction purchase amounts and tightening fuel price spreads.
The fuel price that we charge to any Vehicle Payments 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. The significant volatility in fuel prices can impact these revenues by lowering total fuel transaction purchase amounts and tightening fuel price spreads.
We cannot predict the scope of future developments in sanctions, punitive actions or macroeconomic factors arising from the conflict. These measures are complex and still evolving. Our efforts to comply with such measures may be costly and time consuming and will divert the attention of management.
We cannot predict the scope of future developments in sanctions, punitive actions or macroeconomic factors arising from these conflicts. These measures are complex and still evolving. Our efforts to comply with such measures may be costly and time consuming and will divert the attention of management.
For more information about laws, regulations and enforcement activities that may adversely affect our products and services and the markets in which we operate, see “Business- Regulatory.” 25 Table of Contents Derivatives regulations have added costs to our business and any additional requirements, such as future registration requirements and increased regulation of derivative contracts, may result in additional costs or impact the way we conduct our hedging activities, as well as impact how we conduct our business within our international payments provider operations.
For more information about laws, regulations and enforcement activities that may adversely affect our products and services and the markets in which we operate, see “Business- Regulatory.” Derivatives regulations have added costs to our business and any additional requirements, such as future registration requirements and increased regulation of derivative contracts, may result in additional costs or impact the way we conduct our hedging activities, as well as impact how we conduct our business within our international payments provider operations.
These types of inquiries, audits, reviews, and investigations could result in the institution of administrative or civil proceedings, sanctions and the payment of fines and penalties, various forms of injunctive relief and redress, changes in personnel, and increased review and scrutiny by customers, 27 Table of Contents regulatory authorities, the media and others, which could be significant and could have a material adverse effect on our business, reputation, financial condition and results of operations.
These types of inquiries, audits, reviews, and investigations could result in the institution of administrative or civil proceedings, sanctions and the payment of fines and penalties, various forms of injunctive relief and redress, changes in personnel, and increased review and scrutiny by customers, regulatory authorities, the media and others, which could be significant and could have a material adverse effect on our business, reputation, financial condition and results of operations.
As a result, the success of these solutions is in part dependent on our ability to maintain relationships with major oil companies, petroleum marketers, closed-loop fuel and lodging merchants, truck stop operators, airlines and sales channels (each of whom we refer to as our “partners”) and to enter into additional relationships or expand existing arrangements to increase the acceptability of our payment cards.
As a result, the success of these solutions is in part dependent on our ability to maintain relationships with major oil companies, petroleum marketers, closed-loop fuel and lodging merchants, truck stop operators, airlines, sales channels, and other channels and partnerships (each of whom we refer to as our “partners”) and to enter into additional relationships or expand existing arrangements to increase the acceptability of our payment solutions.
The extent of the impact of these tragic events on our business remains uncertain and will continue to depend on numerous evolving factors that we are not able to accurately predict, including the extent, severity, duration and outcome of the conflict.
The extent of the impact of these tragic events on our business remains uncertain and will continue to depend on numerous evolving factors that we are not able to accurately predict, including the extent, severity, duration and outcome of these conflicts.
In addition, we may not be able to obtain additional financing on 22 Table of Contents terms favorable to us, if at all, which could limit our ability to engage in acquisitions. Moreover, we can make no assurances that the anticipated benefits of any acquisition, such as operating improvements or anticipated cost savings, would be realized.
In addition, we may not be able to obtain additional financing on terms favorable to us, if at all, which could limit our ability to engage in acquisitions. Moreover, we can make no assurances that the anticipated benefits of any acquisition, such as operating improvements or anticipated cost savings, would be realized.
Rules adopted under the Dodd-Frank Act by the CFTC, provisions of the European Market Infrastructure Regulation and its technical standards, as well as derivative reporting in Canada and the U.S., have subjected certain of the foreign exchange derivative contracts we offer to our customers as part of our Cross-Border solutions to reporting, record keeping, and other requirements.
Rules adopted under the Dodd-Frank Act by the CFTC in the U.S., provisions of the European Market Infrastructure Regulation and its technical standards in the UK and EU, as well as derivative reporting in Canada and Australia, have subjected certain of the foreign exchange derivative contracts we offer to our customers as part of our Cross-Border solutions to reporting, record keeping, and other requirements.
When our fleet customers purchase fuel, certain arrangements in our Fuel solutions generate revenue as a percentage of the fuel transaction purchase amount and other arrangements generate revenue based on fuel price spreads.
When our fleet customers purchase fuel, certain arrangements in our Vehicle Payments solutions generate revenue as a percentage of the fuel transaction purchase amount and other arrangements generate revenue based on fuel price spreads.
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 Fuel customers, or the fuel price we charge to our Fuel customers decreases at a faster rate than the merchant’s wholesale cost of fuel.
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 Vehicle Payments customers, or the fuel price we charge to our Vehicle Payments customers decreases at a faster rate than the merchant’s wholesale cost of fuel.
While we maintain insurance covering certain security and privacy damages and claim expenses we may not carry insurance or maintain coverage sufficient to compensate for all liability and such insurance may not be available for renewal on acceptable terms or at all, and in any event, insurance coverage would not address the reputational damage that could result from a security incident.
While we maintain insurance covering certain security and privacy damages and claim expenses above a certain financial retention level, we may not carry insurance or maintain coverage sufficient to compensate for all liability and such insurance may not be available for renewal on acceptable terms or at all, and in any event, insurance coverage would not address the reputational damage that could result from a security incident.
Additionally, we may also face negative publicity and reputational risk based on the actions we take or are required to take as a result of the conflict, which could damage our brand image or corporate reputation.
Additionally, we may also face negative publicity and reputational risk based on the actions we take or are required to take as a result of these conflicts, which could damage our brand image or corporate reputation.
To successfully operate our business, we must be able to protect our processing and other systems from interruption, including from events that may be beyond our control. Events that could cause system interruptions include fire, natural disaster, unauthorized entry, power loss, telecommunications failure, computer viruses, terrorist acts and war.
To successfully operate our business, we must be able to protect our processing and other systems from interruption, including from events that may be beyond our control. Events that could cause system interruptions include, but are not limited to, fire, natural disaster, unauthorized entry, power loss, telecommunications failure, computer viruses, terrorist acts and war.
If we are unable to successfully address sustainability enhancement, we may lose partners or merchants, our stock price may be negatively impacted, our reputation may be negatively affected, and it may be more difficult for us to effectively compete. We contract with government entities and are subject to risks related to our governmental contracts.
If we are unable to successfully address sustainability enhancement, we may 28 Table of Contents lose partners or merchants, our stock price may be negatively impacted, our reputation may be negatively affected, and it may be more difficult for us to effectively compete. We contract with government entities and are subject to risks related to our governmental contracts.
In cases where the currency market experiences significant disruption, our clients may take longer to post variation margin or collateral than what is required of our Cross-Border division related to its own interbank counterparties, resulting in transitory periods of elevated liquidity risk. Derivative transactions and delayed settlements may expose us to unexpected risk and potential losses.
In cases where the 27 Table of Contents currency market experiences significant disruption, our clients may take longer to post variation margin or collateral than what is required of our Cross-Border solution related to its own interbank counterparties, resulting in transitory periods of elevated liquidity risk. Derivative transactions and delayed settlements may expose us to unexpected risk and potential losses.
Additionally, the counterparties to the derivative financial instruments that we use in our international payments provider business to reduce our exposure to various market risks, including changes in foreign exchange rates, may fail to honor their obligations, which could expose us to risks we had sought to mitigate.
Additionally, the counterparties to the 19 Table of Contents derivative financial instruments that we use in our international payments provider business to reduce our exposure to various market risks, including changes in foreign exchange rates, may fail to honor their obligations, which could expose us to risks we had sought to mitigate.
Risks related to our debt Our debt obligations, or our incurrence of additional debt obligations, could limit our flexibility in managing our business and could materially and adversely affect our financial performance. At December 31, 2022, we had approximatel y $7.1 billion of debt outstanding under our Credit Facility and Securitization Facility.
Risks related to our debt Our debt obligations, or our incurrence of additional debt obligations, could limit our flexibility in managing our business and could materially and adversely affect our financial performance. At December 31, 2023, we had approximatel y $6.7 billion of debt outstanding under our Credit Facility and Securitization Facility.
If we fail to develop and implement new technology, products and services, adapt our products and services to changes in technology, the marketplace requirements, or if our ongoing efforts to upgrade our technology, products and services are not successful, we could lose customers and partners.
If we fail to develop and implement new technology, products and services, adapt our products and services to changes in technology, or if our ongoing efforts to upgrade our technology, products and services are not successful, we could lose customers and partners.
Other than a previously disclosed unauthorized access incident during the second quarter of 2018, we are not aware of any material breach of our or our associated third parties’ computer systems, although we and others in our industry are regularly the subject of attempts by bad actors to gain unauthorized access to these computer systems and data or to obtain, change or destroy confidential data (including personal consumer information of individuals) through a variety of means. 16 Table of Contents Because techniques used to sabotage or obtain unauthorized access to our systems and the data we collect change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
Other than a previously disclosed unauthorized access incident during the second quarter of 2018, we are not aware of any material breach of our or our associated third parties’ computer systems, although we and others in our industry are regularly the subject of attempts by bad actors to gain unauthorized access to these computer systems and data or to obtain, change or destroy confidential data (including personal consumer information of individuals) through a variety of means. 17 Table of Contents Because techniques used to sabotage or obtain unauthorized access to our systems and the data we collect change frequently and may not be recognized until launched against a target, especially considering heightened threats and risks associated with artificial intelligence, we may be unable to anticipate these techniques or to implement adequate preventative measures.
Governmental regulations and contractual obligations designed to protect or limit access to personal information could adversely affect our ability to effectively provide our services. Governmental bodies in the U.S. and abroad have adopted, or are considering the adoption of, laws and regulations restricting the transfer of, and requiring safeguarding of, non-public personal information.
Laws, governmental regulations and contractual obligations designed to protect or limit access to personal information could adversely affect our ability to effectively provide our services. Governmental bodies in the U.S. and abroad have adopted, or are considering the adoption of, laws and regulations granting consumer rights to, restricting the transfer of, and requiring safeguarding of, personal information.
Similarly, because some of our solutions are marketed under the brands of major oil companies, certain other adverse events outside our control, like those companies’ failure to maintain their brands or a decrease in the size of their branded networks may adversely affect our ability to grow our revenue.
Similarly, because some of our solutions are independently marketed, certain other adverse events outside our control, like those companies’ failure to maintain their brands or a decrease in the size of their branded networks may adversely affect our ability to grow our revenue.
In Fuel solutions, major oil companies, petroleum marketers and large financial institutions may choose to integrate fuel card services as a complement to their existing or complementary card products and services to adapt more quickly to new or emerging technologies, such as EVs, and changing opportunities, standards or customer requirements.
In Vehicle Payments 20 Table of Contents solutions, major oil companies, petroleum marketers and large financial institutions may choose to integrate fuel card services as a complement to their existing or complementary card products and services to adapt more quickly to new or emerging technologies, such as EVs, and changing opportunities, standards or customer requirements.
We cannot be certain that the investment and additional resources required to establish, acquire or integrate operations in other countries will produce desired levels of revenue or profitability. Our payment solutions' results are subject to seasonality, which could result in fluctuations in our quarterly net income.
We cannot be certain that the investment and additional resources required to establish, acquire or integrate operations in other countries will produce desired levels of revenue or profitability. 24 Table of Contents Our payment solutions' results are subject to seasonality, which could result in fluctuations in our quarterly financial results.
The volatility is due to many factors outside our control, including new oil production or production slowdowns, supply and demand for oil and gas and market expectations of future 20 Table of Contents supply and demand, political conditions, actions by OPEC and other major oil producing countries, speculative trading, government regulation, weather and general economic conditions.
The volatility is due to many factors outside our control, including new oil production or production slowdowns, supply and demand for oil and gas and market expectations of future supply and demand, merchant mix and fuel type, political conditions, actions by OPEC and other major oil producing countries, speculative trading, government regulation, weather and general economic conditions.
We are subject to government regulations covering a number of different areas, including, among others: interest rate and fee restrictions; credit access and disclosure requirements; licensing and registration requirements; collection and pricing regulations; compliance obligations; security, privacy and data breach requirements; identity theft protection programs; and AML compliance programs.
We are subject to government regulations covering a number of different areas, including, among others: interest rate and fee restrictions; credit access and disclosure requirements; licensing and registration requirements, including money transmitter licenses; collection and pricing regulations; compliance obligations; security, privacy and data breach requirements; identity theft protection programs; countering terrorist financing; AML compliance programs and consumer protection.
Moreover, we may incur asset impairment charges related to divestitures that reduce our profitability. Our divestiture activities may present financial, managerial and operational risks.
Moreover, we may incur asset impairment 23 Table of Contents charges related to divestitures that reduce our profitability. Our divestiture activities may present financial, managerial and operational risks.
As a result, new or expanded regulation focusing on business customers or changes in interpretation or enforcement of regulations may have an adverse effect on our business and operating results, due to increased compliance costs and new restrictions affecting the terms under which we offer our products and services.
As a result, new or expanded regulation focusing on business customers or changes in interpretation or enforcement of regulations, as well 26 Table of Contents as increased penalties and enforcement actions related to non-compliance, may have an adverse effect on our business and operating results, due to increased compliance costs and new restrictions affecting the terms under which we offer our products and services.
For example, our transaction volume is generally correlated with general economic conditions and levels of spending, particularly in the U.S., Europe, Latin America, Russia, Australia and New Zealand, and the related amount of business activity 18 Table of Contents in economies in which we operate.
For example, our transaction volume is generally correlated with general economic conditions and levels of spending, particularly in the U.S., Canada, the United Kingdom, Europe, Latin America, Australia and New Zealand, and the related amount of business activity in economies in which we operate.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Material Cash Requirements and Uses of Cash;” • covenants relating to our debt may limit our ability to enter into certain contracts, pay dividends or to obtain additional financing for acquisitions, working capital, capital expenditures and other general corporate activities, including to react to changes in our business or the industry in which we operate; • events outside our control, including volatility in the credit markets or a significant rise in fuel prices, may make it difficult to renew our Securitization Facility on terms acceptable to us and limit our ability to timely fund our working capital needs; • we may be more vulnerable than our less leveraged competitors to the impact of economic downturns and adverse developments in the industry in which we operate; and • we are exposed to the risk of increased interest rates because our borrowings are generally subject to variable or floating rates of interest. 28 Table of Contents In addition, we and our subsidiaries may incur substantial additional indebtedness in the future, including through our Securitization Facility.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Material Cash Requirements and Uses of Cash;” • covenants relating to our debt may limit our ability to enter into certain contracts, pay dividends or to obtain additional financing for acquisitions, working capital, capital expenditures and other general corporate activities, including to react to changes in our business or the industry in which we operate; • events outside our control, including volatility in the credit markets or a significant rise in fuel prices, may make it difficult to renew our Securitization Facility on terms acceptable to us and limit our ability to timely fund our working capital needs; • the amount of receivables that qualify under our Securitization Facility could decrease, which could materially and adversely impact our liquidity; • we may be more vulnerable than our less leveraged competitors to the impact of economic downturns and adverse developments in the industry in which we operate; and • we are exposed to the risk of increased interest rates because our borrowings are generally subject to variable or floating rates of interest.
Our card solutions include a variety of fees and charges associ ated with transactions, cards, reports, optional services and late payments. Revenues for late fees and finance charges represented 5% of o ur consolidated revenue for the year ended December 31, 2022.
Our card solutions include a variety of fees and charges associ ated with transactions, cards, reports, optional services and late payments. Revenues for late fees and finance charges represented approxima tely 4% of our consolidated revenue for the year ended December 31, 2023.
We are party to a large number of derivative transactions. Many of these derivative instruments are individually negotiated and non-standardized, which can make exiting, transferring or settling positions difficult.
In connection with our Cross-Border business, we are party to a large number of derivative transactions. Many of these derivative instruments are individually negotiated and non-standardized, which can make exiting, transferring or settling positions difficult.
These relationships vary in length from one to eight years for oil companies to one to two years for merchants and may be renegotiated at the end of their respective terms. Due to the highly competitive, and at times exclusive, nature of these relationships, we often must participate in a competitive bidding process to establish or continue the relationships.
These relationships vary in length and may be renegotiated at the end of their respective terms. Due to the highly competitive, and at times exclusive, nature of these relationships, we often must participate in a competitive bidding process to establish or continue the relationships.
For the year ended December 31, 2022, approxi mately 39% of our revenue was denominated in currencies other than the U.S. dollar (primarily, British pound, Brazilian real, Canadian dollar, Russian ruble, Mexican peso, Czech koruna, euro, Australian dollar and New Zealand dollar).
For the year ended December 31, 2023, approxi mate ly 43% o f our revenue was denominated in currencies other than the U.S. dollar (primarily, British pound, Brazilian real, Canadian dollar, Russian ruble, Mexican peso, Czech koruna, euro, Australian dollar and New Zealand dollar).
Our Fuel and Payroll Card solutions are typically subject to seasonal fluctuations in revenues and profit, which are impacted during the first and fourth quarter each year by the weather, holidays in the U.S., Christmas being celebrated in Russia in January, and lower business levels in Brazil due to summer break and the Carnival celebration.
Our Vehicle Payments solutions are typically subject to seasonal fluctuations in revenues and profit, which are impacted during the first and fourth quarter each year by the weather, holidays in the U.S., and lower business levels in Brazil due to summer break and the Carnival celebration.
Adverse macroeconomic conditions within the U.S. or internationally, including but not limited to recessions, inflation, rising interest rates, high unemployment, currency fluctuations, actual or anticipated large-scale defaults or failures, rising energy prices, or a slowdown of global trade, and reduced consumer, small business, government, and corporate spending, have a direct impact on the demand for fuel, business-related products and services, or payment card services in general.
Adverse macroeconomic conditions within the U.S. or internationally, including but not limited to recessions, inflation, rising interest rates, labor shortages and disputes, high unemployment, currency fluctuations, actual or anticipated large-scale defaults or failures, terrorist attacks, prolonged or recurring government shutdowns, regional or domestic hostilities, economic sanctions and the prospect or occurrence or more widespread conflicts, rising energy prices, or a slowdown of global trade, and reduced consumer, small business, government, and corporate spending, have a direct impact on the demand for fuel, business-related products and services, or payment card services in general.
In addition, several market factors can affect the amount of our fees and charges, including the market for similar charges for competitive card products and the availability of alternative payment methods such as cash or house accounts. Furthermore, regulators and Congress have scrutinized the electronic payments industry’s pricing, charges and other practices related to its customers.
In addition, several market factors can affect the amount of our fees and charges, including the market for similar charges for competitive card products and the availability of alternative payment methods. Furthermore, regulators and Congress have passed new legislation that changes the electronic payments industry’s pricing, charges and other practices related to its customers.
Adverse effects on payment card transaction volume, including from unfavorable macroeconomic conditions, weather conditions, natural catastrophes or public health crises or from changes to business purchasing practices, could adversely affect our revenues and operating results.
Risks related to our business and operations Adverse effects on payment card transaction volume and other aspects of our business and operations, from unfavorable macroeconomic conditions, weather conditions, natural catastrophes or public health crises or from changes to business purchasing practices, could adversely affect our financial condition and operating results.
Similar AML and counter-terrorist financing and proceeds of crime laws apply to movements of currency and payments through electronic transactions and to dealings with persons specified in lists maintained by the country equivalent to OFAC lists in several other countries and require specific data retention obligations to be observed by intermediaries in the payment process.
Other group entities may be subject to additional foreign or local sanctions requirements in other relevant jurisdictions. 29 Table of Contents Similar AML and counter-terrorist financing and proceeds of crime laws apply to movements of currency and payments through electronic transactions and to dealings with persons specified in lists maintained by the country equivalent to OFAC lists in several other countries and require specific data retention obligations to be observed by intermediaries in the payment process.
If we fail to adequately manage our credit risks, our bad debt expense could be significantly higher than historic levels and adversely affect our business, operating results and financial condition.
If we fail to adequately manage our credit risks, our bad debt expense could be significantly higher than historic levels and adversely affect our business, operating results and financial condition. We may incur substantial losses due to fraudulent use of our payment solutions.
In addition, the risk of cyber-attacks has increased in connection with the military conflict between Russia and Ukraine and the resulting geopolitical conflict.
In addition, the risk of cyber-attacks has increased in connection with the military conflicts between Russia and Ukraine, as well as within the Middle East, and the resulting geopolitical conflicts.
Other jurisdictions outside the U.S., U.K., and the European Union are considering, have implemented, or are implementing regulations similar to those described above and these may result in greater costs to us as well. In September 2022, the sixth and final phase of the Uncleared Margin Rules (UMR) in the U.S. and EU took effect.
Other jurisdictions outside the U.S., U.K., and the European Union are considering, have implemented, or are implementing regulations similar to those described above and these may result in greater costs to us as well.
We operate in a competitive business environment, and if we are unable to compete effectively, our business, operating results and financial condition would be adversely affected. 19 Table of Contents The market for our solutions is highly competitive, and competition could intensify in the future.
Any restrictions on our ability to price our products and services could materially and adversely affect our revenue. We operate in a competitive business environment, and if we are unable to compete effectively, our business, operating results and financial condition would be adversely affected. The market for our solutions is highly competitive, and competition could intensify in the future.
In addition, we might be required to seek a license for the use of a third party’s intellectual property, which may not be available on commercially reasonable terms or at all.
In addition, we might be required to seek a license for the use of a third party’s intellectual property, which may not be available on commercially reasonable terms or at all. Alternatively, we might be required to develop non-infringing technology, which could require significant effort and expense and might ultimately not be successful.
The enforcement of our intellectual property rights also depends on our legal actions against these infringers being successful, and we cannot be sure these actions will be successful, even when our rights have been infringed.
Moreover, others may independently develop technologies that are competitive to ours or infringe our intellectual property. The enforcement of our intellectual property rights also depends on our legal actions against these infringers being successful, and we cannot be sure these actions will be successful, even when our rights have been infringed.
A portion of our revenue is generated by network processing fees charged to merchants, known as interchange fees, associated with transactions processed using our Mastercard-branded cards. Interchange fee amounts associated with our Mastercard network cards are affected by a number of factors, including regulatory limits in the U.S. and Europe and fee changes imposed by Mastercard.
Interchange fee amounts associated with our Mastercard network cards are affected by a number of factors, including regulatory limits in the U.S. and Europe and fee changes imposed by Mastercard.
If we are unable to find a replacement financial institution to provide sponsorship or become a member, we may no longer be able to provide such services to the affected customers. Changes in Mastercard interchange fees could decrease our revenue.
The termination of our registration, or any changes in the payment network rules that would impair our registration, could require us to stop providing Mastercard payment processing services. If we are unable to find a replacement financial institution to provide sponsorship or become a member, we may no longer be able to provide such services to the affected customers.
On at least an annual basis, we assess whether there have been impairments in the carrying value of goodwill and indefinite-lived intangible assets. If the carrying value of the asset is determined to be impaired, it is written down to fair value by a charge to operating earnings, which could materially negatively affect our operating results and financial condition.
If the carrying value of the asset is determined to be impaired, it is written down to fair value by a charge to operating earnings, which could materially negatively affect our operating results and financial condition.
We believe during the year ended December 31, 2022, approximately 13% of our consolidated revenue was directly influenced by the absolute price of fuel. Approximately 6% of our consolidated revenue during the year ended December 31, 2022 was derived from transactions where our revenue is tied to fuel price spreads.
Approximately 5% of our consolidated revenue du ring the year ended December 31, 2023 was derived from transactions where our revenue is tied to fuel price spreads.
Domestic and foreign government regulations impose compliance obligations on us and restrictions on our operating activities, which can be difficult to administer because of their scope, mandates and varied requirements.
The laws and regulations applicable to us, including those enacted prior to the advent of digital payments, continue to evolve through legislative and regulatory action and judicial interpretation. Domestic and foreign government regulations impose compliance obligations on us and restrictions on our operating activities, which can be difficult to administer because of their scope, mandates and varied requirements.
The current conflict between Russia and Ukraine is creating substantial uncertainty about the role Russia will play in the global economy in the future. Although the extent, duration, severity and outcome of the ongoing military conflict between Russia and Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions.
The current military conflicts between Russia and Ukraine, as well as within the Middle East, are creating substantial uncertainty about the global economy in the future. Although the length, impact and outcome of the ongoing military conflicts between Russia and Ukraine and within the Middle East are highly unpredictable, these conflicts could lead to significant market and other disruptions.
The markets for our solutions are highly competitive and characterized by technological change, frequent introduction of new products and services and evolving industry standards. We must respond to the technological advances offered by our competitors and the requirements of regulators and our customers and partners, in order to maintain and improve upon our competitive position and fulfill contractual obligations.
We must respond to the technological advances offered by our competitors, including the use of artificial intelligence, and the requirements of regulators and our customers and partners, in order to maintain and improve upon our competitive position and fulfill contractual obligations.
If we do not comply with Mastercard requirements, it could seek to fine us, suspend us or terminate our registration, which allows us to process transactions on its networks. The termination of our registration, or any changes in the payment network rules that would impair our registration, could require us to stop providing Mastercard payment processing services.
If we do not comply with Mastercard requirements, it could seek 21 Table of Contents to fine us, suspend us or terminate our registration, which allows us to process transactions on its networks.
Subject to ongoing negotiations, we currently expect to complete the disposition of the Russia business in the second or third quarter of 2023. In response to the Russian invasion of Ukraine, the U.S., the European Union, the U.K. and other governments have imposed sanctions and other restrictive measures.
In response to the Russian invasion of Ukraine, the U.S., the European Union, the U.K. and other governments have imposed sanctions and other restrictive measures.
When such volatility leads to a decline in retail fuel prices or a contraction of fuel price spreads, our revenue and operating results could be adversely affected. The value of certain of our solutions depend, in part, on relationships with oil companies, fuel and lodging merchants, truck stop operators, airlines and sales channels to grow our business.
The value of certain of our solutions depend, in part, on relationships with oil companies, fuel and lodging merchants, truck stop operators, airlines, sales channels, and other channels and partnerships to grow our business. The failure to maintain and grow existing relationships, or establish new relationships, could adversely affect our revenues and operating results.
The failure to maintain and grow existing relationships, or establish new relationships, could adversely affect our revenues and operating results. The success and growth of our solutions depend on the wide acceptability of such cards when our customers need to use them.
The success and growth of our solutions depend on the wide acceptability of such cards when our customers need to use them.
These arrangements require periodic audits by independent companies regarding our compliance with industry standards such as PCI standards and also allow for similar audits regarding best practices established by regulatory guidelines.
These arrangements require periodic audits by independent companies regarding our compliance with industry standards such as PCI standards and also allow for similar audits regarding best practices established by regulatory guidelines. The compliance standards relate to our infrastructure, components, and operational procedures designed to safeguard the confidentiality and security of non-public consumer personal information received from our customers.
See “Our fleet card business is dependent on several key strategic relationships, the loss of which could adversely affect our operating results.” and “If we are unable to maintain and expand our merchant relationships, our closed loop fleet card and lodging card businesses may be adversely affected.” Because our business depends on the level of activity in the oil industry, existing or future laws or regulations related to GHGs and climate change, including incentives to conserve energy or use alternative energy sources, could have a negative impact on our business if such laws or regulations reduce demand for fuel.
Because our business depends on the level of activity in the oil industry, existing or future laws or regulations related to GHGs and climate change, including incentives to conserve energy or use alternative energy sources, could have a negative impact on our business if such laws or regulations reduce demand for fuel.
In light of this development, banks and other non-bank financial institutions are subject to additional regulatory requirements associated with trading non-centrally cleared OTC derivatives with any counterparty that has $8 billion or more in total derivatives within its portfolio. Non-centrally cleared OTC derivatives can have certain advantages over exchange-traded and centrally cleared derivatives.
Banks and other non-bank financial institutions are subject to additional regulatory requirements associated with trading non-centrally cleared OTC derivatives with any counterparty that has $8 billion or more in total derivatives within its portfolio. This is as a result of the full implementation of the Uncleared Margin Rules (UMR), which completed the sixth and final phases in September 2022.
If we fail to comply with these regulations, we could be exposed to suits for breach of contract or to governmental proceedings. In addition, our client relationships and reputation could be harmed, and we could be inhibited in our ability to obtain new clients.
Our ability to maintain compliance with these standards and satisfy these audits will affect our ability to attract and maintain business in the future. If we fail to comply with these regulations, we could be exposed to suits for breach of contract or to governmental proceedings.
We cannot predict how and the extent to which the conflict will affect our customers, operations or business partners or the demand for our products and our global business. Depending on the actions we take or are required to take, the ongoing conflict could also result in loss of assets or impairment charges.
We cannot predict how and the extent to which these conflicts will affect our customers, operations or business partners or the demand for our products and our global business. We are actively monitoring the situations and assessing the impact on our business.
Negative public perception, adverse publicity or negative comments in social media could damage our reputation if we do not, or are not perceived to, adequately address these issues. Any harm to our reputation could impact employee engagement and retention and the willingness of customers and our partners to do business with us.
Any harm to our reputation could impact employee engagement and retention and the willingness of customers and our partners to do business with us.
We cannot be certain that the steps we have taken will prevent the unauthorized use or the reverse engineering of our proprietary technology. Moreover, others may independently develop technologies that are competitive to ours or infringe our intellectual property.
Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property and proprietary information. 25 Table of Contents We cannot be certain that the steps we have taken will prevent the unauthorized use or the reverse engineering of our proprietary technology.
In the payments technology markets, these risks are even more acute. Any delay in the delivery of new services or the failure to differentiate our services could render our services less desirable to customers, or possibly even obsolete. A decline in retail fuel prices or contraction in fuel price spreads could adversely affect our revenue and operating results.
Any delay in the delivery of new services or the failure to differentiate our services could render our services less desirable to customers, or possibly even obsolete.
This litigation could be costly and divert management resources, either of which could harm our business, operating results and financial condition. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property and proprietary information.
This litigation could be costly and divert management resources, either of which could harm our business, operating results and financial condition.
These assets consist primarily of goodwill and identified intangible assets associated with our acquisitions, which may increase in the future in connection with new acquisitions. Under current accounting standards, we are required to amortize certain intangible assets over the useful life of the asset, while goodwill and indefinite-lived intangible assets are not amortized.
Under current accounting standards, we are required to amortize certain intangible assets over the useful life of the asset, while goodwill and indefinite-lived intangible assets are not amortized. On at least an annual basis, we assess whether there have been impairments in the carrying value of goodwill and indefinite-lived intangible assets.
The impairment of a significant portion of these assets would negatively affect our financial results. Our balance sheet includes goodwill and intangible assets that represent a pproximately 52% of o ur total assets at December 31, 2022.
If new debt is added to our existing debt levels, the related risks that we will face would increase. Our balance sheet includes significant amounts of goodwill and intangible assets. The impairment of a significant portion of these assets would negatively affect our financial results.
In order to best meet a client’s risk management objectives, our Cross-Border solution would like to preserve the ability to continue trading these types of OTC derivatives when possible. The most broadly used OTC derivative at Cross-Border Solutions are FX forwards, the most common financial tool used in the marketplace to hedge currency.
The most broadly used OTC derivative at Cross-Border Solutions are foreign currency forwards, the most common financial tool used in the marketplace to hedge currency.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur largest offices internationally are located in São Paulo, Brazil; Prague, Czech Republic; and Mexico City, Mexico. We lease all of the real property used in our business, except for our headquarters in Mexico City, which we own. 29 Table of Contents
Biggest changeOur largest offices internationally are located in São Paulo, Brazil; London, United Kingdom; Prague, Czech Republic; Mexico City, Mexico and Toronto, Canada. We lease all of the real property used in our business, except for a portion of our headquarters in Mexico City, which we own. 32 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFollowing mediation, both parties have filed proposed orders with the Court. The Company has incurred and continues to incur legal and other fees related to this 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.
Biggest changeAny settlement of this matter, or defense against the lawsuit, could involve costs to the Company, including legal fees, redress, penalties, and remediation expenses.
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.
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 Ron Clarke violated the FTC Act’s prohibitions on unfair and deceptive acts and practices.
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.
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 33 Table of Contents are in the stages of the proceedings where key factual and legal issues have not been resolved.
On January 24, 2023, the previous Federal Derivative Action plaintiffs filed a similar new derivative lawsuit, J errell 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 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.
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. 30 Table of Contents
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.
Added
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.
Added
On August 17, 2023, the FTC Commission ordered that the stay of the parallel Section 5 administration 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table presents information with respect to purchase of common stock of the Company made during the three months ended December 31, 2022 by the Company as defined in Rule 10b-18(a)(3) under the Exchange Act: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of the Publicly Announced Plan Maximum Value that May Yet be Purchased Under the Publicly Announced Plan (in thousands) October 1, 2022 through October 31, 2022 46 $ 169.52 25,699,597 $ 1,355,261 November 1, 2022 through November 30, 2022 581,311 $ 188.45 26,280,908 $ 1,245,714 December 1, 2022 through December 31, 2022 — $ — 26,280,908 $ 1,245,714 32 Table of Contents PERFORMANCE GRAPH The following graph assumes $100 invested on December 29, 2017, at the closing price ($192.43) of our common stock on that day, and compares (a) the percentage change of our cumulative total stockholder return on the common stock (as measured by dividing (i) the difference between our share price at the end and the beginning of the period presented by (ii) the share price at the beginning of the periods presented) with (b) (i) the Russell 2000 Index, (ii) the S&P 500 ® Data Processing & Outsourced Services and (iii) S&P 500.
Biggest changeThe following table presents information with respect to purchase of common stock of the Company made during the three months ended December 31, 2023 by the Company as defined in Rule 10b-18(a)(3) under the Exchange Act: Period Total Number of Shares Purchased 1 Average Price Paid Per Share Total Number of Shares Purchased as Part of the Publicly Announced Plan Maximum Value that May Yet be Purchased Under the Publicly Announced Plan (in thousands) October 1, 2023 through October 31, 2023 325 $ 235.28 — November 1, 2023 through November 30, 2023 14 $ 233.41 — December 1, 2023 through December 31, 2023 563,703 $ 254.01 563,703 $ 558,853 1 During the quarter ended December 31, 2023, pursuant to our Stock Incentive Plan, we withheld 339 shares, at an average price per share of $235.20, in order to satisfy employees' tax withholding obligations in connection with the vesting of awards of restricted stock. 35 Table of Contents PERFORMANCE GRAPH The following graph assumes $100 invested on December 31, 2018, at the closing price ($185.72) of our common stock on that day, and compares (a) the percentage change of our cumulative total stockholder return on the common stock (as measured by dividing (i) the difference between our share price at the end and the beginning of the period presented by (ii) the share price at the beginning of the periods presented) with (b) (i) the Russell 2000 Index, (ii) the S&P 500 ® Data Processing & Outsourced Services and (iii) S&P 500.
DIVIDENDS AND SHARE REPURCHASES We currently expect to retain all future earnings, if any, for use in the operation and expansion of our business. We have never declared or paid any dividends on our common stock and do not anticipate paying cash dividends to holders of our common stock in the foreseeable future.
DIVIDENDS AND STOCK REPURCHASES We currently expect to retain all future earnings, if any, for use in the operation, expansion of our business and stock repurchases. We have never declared or paid any dividends on our common stock and do not anticipate paying cash dividends to holders of our common stock in the foreseeable future.
RECENT SALES OF UNREGISTERED SECURITIES AND USE OF PROCEEDS Not Applicable. ITEM 6. (RESERVED) 33
RECENT SALES OF UNREGISTERED SECURITIES AND USE OF PROCEEDS Not Applicable. ITEM 6. (RESERVED) 36
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the New York Stock Exchange (NYSE) under the ticker FLT. As of December 31, 2022, there were 426 holders o f record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the New York Stock Exchange (NYSE) under the ticker FLT. As of December 31, 2023, there were 454 h olders o f record of our common stock.
Since the beginning of the Program through December 31, 2022, 26,280,908 shares have been repurchased for an aggregate purchase price of $5.9 billion, leaving the Company up to $1.2 billion of remaining authorization available under the Program for future repurchases in shares of its common stock.
Since the beginning of the Program through December 31, 2023, the Company repurchased 28,878,862 shares for an aggregate purcha se price of $6.5 billion, leaving the Company up to $1.6 billion of remaining authorization available under the Program for future repurchases of shares of its common stock.
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 1, 2024.
The Company's Board of Directors (the "Board") has approved a stock repurchase prog ram (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.
There were 6,212,410 common shares totaling $1.4 billion in 2022; 5,451,556 common shares totaling $1.4 billion in 2021 and 3,497,285 common shares totaling $940.8 million in 2020; repurchased under the Program. Any stock repurchases may be made at times and in such amounts as deemed appropriate.
The Company repurchased 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.
Removed
On January 25, 2022, the Board increased the aggregate size of the Program by $1.0 billion, to $6.1 billion, and on October 25, 2022, the Board increased the aggregate size of the Program again by $1.0 billion to $7.1 billion.
Added
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.
Added
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.
Added
The transactions contemplated by 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. Any stock repurchases may be made at times and in such amounts as deemed appropriate.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThese include telematics offerings, fleet maintenance, food and transportation employee benefits related offerings, payroll cards and long-haul transportation services. 37 The following table presents revenue per key performance metric by solution for the years ended December 31, 2022 and 2021 (in millions except revenues, net per key performance indicator).* As Reported Pro Forma and Macro Adjusted 2 Year Ended December 31, Year Ended December 31, 2022 2021 Change % Change 2022 2021 Change % Change FUEL ' - Revenues, net $ 1,378 $ 1,180 $ 198 17 % $ 1,261 $ 1,182 $ 79 7 % ' - Transactions 471 463 9 2 % 471 469 3 1 % ' - Revenues, net per transaction $ 2.92 $ 2.55 $ 0.38 15 % $ 2.68 $ 2.52 $ 0.16 6 % CORPORATE PAYMENTS ' - Revenues, net $ 772 $ 600 $ 172 29 % $ 796 $ 664 $ 132 20 % ' - Spend volume $ 116,866 $ 92,368 $ 24,499 27 % $ 116,866 $ 104,046 $ 12,821 12 % ' - Revenues, net per spend $ 0.66 % 0.65 % 0.01 % 2 % 0.68 % 0.64 % 0.04 % 7 % TOLLS - Revenues, net $ 362 $ 306 $ 56 18 % $ 346 $ 306 $ 40 13 % - Tags 6.2 5.9 0.3 5 % 6.2 5.9 0.3 5 % - Revenues, net per tag $ 58.41 $ 51.59 $ 6.82 13 % $ 55.85 $ 51.59 $ 4.26 8 % LODGING ' - Revenues, net $ 457 $ 310 $ 147 47 % $ 458 $ 365 $ 93 26 % ' - Room nights 37 29 8 28 % 37 33 4 12 % ' - Revenues, net per room night $ 12.24 $ 10.63 $ 1.62 15 % $ 12.29 $ 10.99 $ 1.30 12 % GIFT ' - Revenues, net $ 195 $ 179 $ 15 8 % $ 199 $ 179 $ 19 11 % ' - Transactions 1,193 1,187 6 1 % 1,193 1,187 6 1 % ' - Revenues, net per transaction $ 0.16 $ 0.15 $ 0.01 8 % $ 0.17 $ 0.15 $ 0.02 10 % OTHER 1 ' - Revenues, net $ 263 $ 259 $ 5 2 % $ 271 $ 259 $ 12 5 % ' - Transactions 42 37 5 14 % 42 37 5 14 % ' - Revenues, net per transaction $ 6.34 $ 7.07 $ (0.73) (10) % $ 6.52 $ 7.07 $ (0.54) (8) % FLEETCOR CONSOLIDATED REVENUES, NET ' - Revenues, net $ 3,427 $ 2,834 $ 593 21 % $ 3,332 $ 2,956 $ 376 13 % 1 Other includes telematics, maintenance, food, payroll card and transportation related businesses. 2 See heading entitled "Managements' Use of Non-GAAP Financial Measures" for a reconciliation of pro forma and macro adjusted revenue by product and metric non-GAAP measures to the comparable financial measure calculated in accordance with GAAP. * Columns may not calculate due to rounding.
Biggest changeRevenues, net by key performance metric and organic growth by segment for the years ended December 31, 2023 and 2022, were as follows (in millions except revenues, net per key performance indicator)*: As Reported Pro Forma and Macro Adjusted 2 Year Ended December 31, Year Ended December 31, 2023 2022 Change % Change 2023 2022 Change % Change VEHICLE PAYMENTS ' - Revenues, net $2,005.5 $1,950.0 $55.5 3% $2,037.5 $1,913.8 $123.8 6% ' - Transactions 648.6 594.7 53.9 9% 648.6 629.3 19.3 3% ' - Revenues, net per transaction $3.09 $3.28 $(0.19) (6)% $3.14 $3.04 $0.10 3% ' - Tag transactions 3 79.6 74.4 5.2 7% 79.6 74.4 5.2 7% ' - Parking transactions 68.0 — 68.0 100% 68.0 59.1 8.9 15% ' - Fleet transactions 477.4 501.1 (23.8) (5)% 477.4 476.7 0.7 —% ' - Other transactions 23.7 19.2 4.5 24% 23.7 19.2 4.5 24% CORPORATE PAYMENTS ' - Revenues, net $981.1 $769.6 $211.6 27% $987.4 $829.6 $157.8 19% ' - Spend volume $145,571 $116,827 $28,743 25% $145,571 $126,076 $19,494 15% ' - Revenues, net per spend $ 0.67% 0.66% 0.02% 2% 0.68% 0.66% 0.02% 3% LODGING PAYMENTS ' - Revenues, net $520.2 $456.5 $63.7 14% $520.1 $465.6 $54.5 12% ' - Room nights 36.5 37.3 (0.8) (2)% 36.5 37.9 (1.4) (4)% ' - Revenues, net per room night $14.25 $12.24 2.0 16% $14.25 $12.29 $1.96 16% OTHER 1 ' - Revenues, net $250.9 $251.0 $(0.1) —% $251.1 $251.0 $— —% ' - Transactions 1,309.2 1,192.6 116.6 10% 1,309.2 1,192.6 116.6 10% ' - Revenues, net per transaction $0.19 $0.21 $(0.02) (10)% $0.19 $0.21 $(0.02) (9)% FLEETCOR CONSOLIDATED REVENUES, NET ' - Revenues, net $3,757.7 $3,427.1 $330.6 10% $3,796.1 $3,460.0 $336.1 10% 1 Other includes Gift and Payroll Card operating segments. 2 See heading entitled "Managements' Use of Non-GAAP Financial Measures" for a reconciliation of pro forma and macro adjusted revenue by product and metric non-GAAP measures to the comparable financial measure calculated in accordance with GAAP.
Organic revenue growth is calculated as revenue growth in the current period adjusted for the impact of changes in the macroeconomic environment (to include fuel price, fuel price spreads and changes in foreign exchange rates) over revenue in the comparable prior period adjusted to include or remove the impact of acquisitions and/or divestitures and non-recurring items that have occurred subsequent to that period.
Organic revenue growth is calculated as revenue growth in the current period adjusted for the impact of changes in the macroeconomic environment (to include fuel price, fuel price spreads and changes in foreign exchange rates) over revenue in the comparable prior period adjusted to include or remove the impact of acquisitions and/or divestitures and non-recurring items that have occurred subsequent to that period.
We are amortizing intangible assets related to business acquisitions and certain private label contracts associated with the purchase of accounts receivable. • Other operating, net —Our other operating, net includes other operating expenses and income items that do not relate to our core operations or that occur infrequently. • Other expense (income), net —Our other expense (income), net includes gains or losses from the following: sales of assets, foreign currency transactions, extinguishment of debt, and investments.
We are amortizing intangible assets related to business acquisitions and certain private label contracts associated with the purchase of accounts receivable. • Other operating, net —Our other operating, net includes other operating expenses and income items that do not relate to our core operations or that occur infrequently. • Other (income) expense, net —Our other (income) expense, net includes gains or losses from the following: sales of assets or businesses, foreign currency transactions, extinguishment of debt, and investments.
See the heading entitled “Management’s Use of Non-GAAP Financial Measures” for more information and a reconciliation of the non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP. We believe that organic revenue growth on a macro-neutral, one-time item, and consistent acquisition/divestiture/non-recurring item basis is useful to investors for understanding the performance of FLEETCOR.
See the heading entitled “Management’s Use of Non-GAAP Financial Measures” for more information and a reconciliation of the non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with GAAP. We believe that organic revenue growth on a macro-neutral, one-time item, and 40 consistent acquisition/divestiture/non-recurring item basis is useful to investors for understanding the performance of FLEETCOR.
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. 49 While we use our best estimates and assumptions to determine the fair values of the assets acquired and the liabilities assumed, our estimates are inherently uncertain and subject to refinement.
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. While we use our best estimates and assumptions to determine the fair values of the assets acquired and the liabilities assumed, our estimates are inherently uncertain and subject to refinement.
The discount rates used represented a risk adjusted market participant weighted-average cost of capital, derived using customary market metrics. These measures of fair value also require considerable judgments about future events, including forecasted revenue growth rates, forecasted customer attrition rates, contract renewal estimates and technology changes.
The discount rates used represented a risk adjusted market participant weighted-average cost of capital, derived using customary market metrics. These measures of fair value also require considerable judgments about future events, including forecasted revenue growth rates, forecasted customer attrition rates, contract renewal estimates and technology 52 changes.
The impact of an uncertain income tax position on the income tax return must be recognized 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 percent likelihood of being sustained.
The impact of an uncertain income tax position on the income tax return must be recognized 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.
To support our expected revenue growth, we plan to continue to incur additional sales and marketing expense by investing in our direct marketing, third-party agents, internet marketing, telemarketing and field sales force. • Taxes —We pay taxes in various taxing jurisdictions, including the U.S., most U.S. states and many non-U.S. jurisdictions.
To support our expected revenue growth, we plan to continue to incur additional sales and marketing expense by investing in our direct marketing, third-party agents, internet marketing, telemarketing and sales force. • Taxes —We pay taxes in various taxing jurisdictions, including the U.S., most U.S. states and many non-U.S. jurisdictions.
We also believe that certain expenses, the impact of discrete tax items, impairment charges, asset write-offs, restructuring and related costs, losses on extinguishment of debt, and legal settlements and regulatory-related legal fees do not necessarily reflect how our business is performing.
We also believe that certain expenses, the impact of discrete tax items, the impact of business dispositions, impairment charges, asset write-offs, restructuring and related costs, losses on extinguishment of debt, and legal settlements and regulatory-related legal fees do not necessarily reflect how our business is performing.
In many instances, however, we 47 reasonably could have used different accounting estimates and, in other instances, changes in our accounting estimates could occur from period to period, with the result in each case being a material change in the financial statement presentation of our financial condition or results of operations.
In many instances, however, we reasonably could have used different accounting estimates and, in other instances, changes in our accounting estimates could occur from period to period, with the result in each case being a material change in the financial statement presentation of our financial condition or results of operations.
We utilize a combination of aging and loss-rate methods to develop an estimate of current expected credit losses, depending on the nature and risk profile of the underlying asset pool, based on product, size of customer and historical losses.
We utilize a combination of aging and loss-rate methods to develop an estimate of current expected credit losses, depending on the nature and risk profile of the underlying asset pool, 51 based on product, size of customer and historical losses.
In these transactions, the price paid to the merchant is based on the wholesale cost of fuel. The merchant’s wholesale cost of fuel is dependent on several factors including, among others, the factors 39 described above affecting fuel prices.
In these transactions, the price paid to the merchant is based on the wholesale cost of fuel. The merchant’s wholesale cost of fuel is dependent on several factors including, among others, the factors described above affecting fuel prices.
All foreign currency amounts that have been converted into U.S. dollars in this discussion are based on the exchange rate as reported by Oanda for the applicable periods. The following discussion and analysis of our financial condition and results of operations generally discusses 2022 and 2021 items, with year-over-year comparisons between these two years.
All foreign currency amounts that have been converted into U.S. dollars in this discussion are based on the exchange rate as reported by Oanda for the applicable periods. The following discussion and analysis of our financial condition and results of operations generally discusses 2023 and 2022 items, with year-over-year comparisons between these two years.
Management uses adjusted net income, adjusted net income per diluted share and organic revenue growth: • as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis; • for planning purposes, including the preparation of our internal annual operating budget; • to allocate resources to enhance the financial performance of our business; and • to evaluate the performance and effectiveness of our operational strategies.
Management uses adjusted net income, adjusted net income per diluted share, organic revenue growth and EBITDA: 53 • as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis; • for planning purposes, including the preparation of our internal annual operating budget; • to allocate resources to enhance the financial performance of our business; and • to evaluate the performance and effectiveness of our operational strategies.
Payment Services Our primary performance obligation for the majority of our payment solutions (Corporate Payments, Fuel, Lodging, and Gift, among others) 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.
Payment Services Our primary performance obligation for the majority of our payment solutions (Vehicle Payments, Corporate Payments, Lodging Payments, and Gift, among others) 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.
A detailed discussion of 2021 items and year-over-year comparisons between 2021 and 2020 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.
A detailed discussion of 2022 items and year-over-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.
The unused credit facility fee was 0.25% for all revolving facilities at December 31, 2022. 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.
The unused credit facility fee was 0.25% for all revolving facilities at December 31, 2023. 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.
We also estimate the useful lives of intangible assets to determine the period over which to recognize the amount of acquisition-related intangible assets as an expense. Certain assets may be considered to have indefinite useful lives. We periodically review the estimated useful liv es assigned to our intangible assets to determine whether such estimated useful lives continue to be appropriate.
We also estimate the useful lives of intangible assets to determine the period over which to recognize the amount of acquisition-related intangible assets as an expense. Certain assets may be considered to have indefinite useful lives. We periodically review the estimated useful lives assigned to our intangible assets to determine whether such estimated useful lives continue to be appropriate.
Revenue per relevant key performance indicator (KPI), which may include transaction, spend volume, monthly tags, room nights, or other metrics, is derived from the various revenue types as discussed above and can vary based on geography, the relevant merchant relationship, the payment product utilized and the types of products or services purchased, the mix of which would be influenced by our acquisitions, organic growth in our business, and the overall macroeconomic environment, including fluctuations in foreign currency exchange rates, fuel prices and fuel price spreads.
Revenue per relevant key performance indicator (KPI), which may include transactions, spend volume, room nights, or other metrics, is derived from the various revenue types as discussed above and can vary based on geography, the relevant merchant relationship, the payment product utilized and the types of products or services purchased, the mix of which would be influenced by our acquisitions, organic growth in our business, and the overall macroeconomic environment, including fluctuations in foreign currency exchange rates, fuel prices and fuel price spreads.
Interest on amounts outstanding under the Credit Agreement (other than the term loan B) 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 EURIBOR, or in Japanese yen, at the TIBOR plus a margin based on a leverage ratio, 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).
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 EURIBOR, or in Japanese yen, at the TIBOR plus a margin based on a leverage ratio, 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).
See the Summary of Significant Accounting Policies footnote on page 65 of this Form 10-K for additional information. Revenue recognition and presentation. We provide payment solutions to our business, merchant, consumer and payment network customers.
See the Summary of Significant Accounting Policies footnote on page 67 of this Form 10-K for additional information. Revenue recognition and presentation. We provide payment solutions to our business, merchant, consumer and payment network customers.
The changes in fair value related to these instruments are recorded in revenues, net in the Consolidated Statements of Income. Refer to the Revenue footnote on page 71 of this Form 10-K for additional information. Financial Instruments-Credit Losses.
The changes in fair value related to these instruments are recorded in revenues, net in the Consolidated Statements of Income. Refer to the Revenue footnote on page 74 of this Form 10-K for additional information. Financial Instruments-Credit Losses.
The timing and amount of stock repurchases, if any, will depend on a variety of factors including the stock price, market conditions, corporate and regulatory requirements, and any additional constraints related to material inside information the Company may possess.
The timing and amount of stock repurchases, if any, will depend on a variety of factors including the stock price, market conditions, corporate and regulatory requirements, and any additional constraints related to material inside information we may possess.
The Credit Agreement provides for senior secured credit f acilities (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, 2022.
The Credit Agreement provides for senior secured credit f acilities (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.
We use adjusted net income and adjusted net income per diluted share to eliminate the effect of items that we do not consider indicative of our core operating performance on a consistent basis.
We use adjusted net income, adjusted net income per diluted share, EBITDA and EBITDA margin to eliminate the effect of items that we do not consider indicative of our core operating performance on a consistent basis.
Certain of these items may be presented separately on the Consolidated Statements of Income. • Interest expense, net —Our interest expense, net includes interest expense on our outstanding debt, interest income on operating cash balances and interest on our interest rate swaps. • Provision for income taxes —Our provision for income taxes consists of corporate income taxes related primarily to profits resulting from the sale of our products and services on a global basis.
Certain of these items may be presented separately on the Consolidated Statements of Income. • Interest expense, net —Our interest expense, net includes interest expense on our outstanding debt, interest income on cash balances and interest on our interest rate and cross-currency swaps. • Provision for income taxes —Our provision for income taxes consists of corporate income taxes related primarily to profits resulting from the sale of our products and services on a global basis.
Procee ds 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.
Procee ds from the credit facilities may be used for working capital purposes, acquisitions, and other general corporate purposes. On June 24, 2022, we entered into the twelfth amendment to the Credit Agreement.
We also consider the undrawn amounts under our Securitization Facility and Credit Facility as funds available for working capital purposes and acquisitions. At December 31, 2022, we had no additional liquidity under our Securitization Facility.
We also consider the available and undrawn amounts under our Securitization Facility and Credit Facility as funds available for working capital purposes and acquisitions. At December 31, 2023, we had no additional liquidity under our Securitization Facility.
Sources of Revenue FLEETCOR offers a variety of business payment solutions that help to simplify, automate, secure, digitize and effectively control the way businesses manage and pay their expenses.
Sources of Revenue FLEETCOR offers a variety of payment solutions that help to simplify, automate, secure, digitize and effectively control the way businesses and consumers manage and pay their expenses.
We have defined the non-GAAP measure adjusted net income as net income as reflected in our statement of income, adjusted to eliminate a) non-cash share based compensation expense related to share based compensation awards, (b) amortization of deferred financing costs, discounts, intangible assets and amortization of the premium recognized on the purchase of receivables, (c) integration and deal related costs, and (d) other non-recurring items, including the impact of discrete tax items, impairment charges, asset write-offs, restructuring and related costs, loss on extinguishment of debt, and legal settlements and regulatory-related legal fees.
We have defined the non-GAAP measure adjusted net income as net income as reflected in our statement of income, adjusted to eliminate a) non-cash share based compensation expense related to share based compensation awards, (b) amortization of deferred financing costs, discounts, intangible assets and amortization of the premium recognized on the purchase of receivables, (c) integration and deal related costs, and (d) other non-recurring items, including unusual credit losses, the impact of discrete tax items, the impact of business dispositions, impairment charges, asset write-offs, restructuring costs, loss on extinguishment of debt, and legal settlements and regulatory-related legal fees.
We cease billing and accruing for late fees and finance charges approximately 30 - 40 days after the customer’s balance becomes delinquent. In addition, in our cross-border payments business, we write foreign currency forward and option contracts for our customers to facilitate future payments in foreign currencies.
We cease billing and accruing for late fees and finance charges approximately 30 - 40 days after the customer’s balance becomes delinquent. In addition, in our cross-border payments business, we write foreign currency forwards, option contracts and swaps for our customers to facilitate future payments in foreign currencies.
Stock Repurchase Program Given the Company’s returns on its capital investments and significant cash provided by operations, management believes it is prudent to reinvest in the business to drive profitable growth and use excess cash flow to return cash to shareholders over time through stock repurchases.
Stock Repurchase Program Given our returns on our capital investments and significant cash provided by operations, management believes it is prudent to reinvest in the business to drive profitable growth and use excess cash flow to return cash to shareholders over time through stock repurchases.
Factors and Trends Impacting our Business We believe that the following factors and trends are important in understanding our financial performance: • Global economic conditions —Our results of operations are materially affected by conditions in the economy generally, in North America, Brazil, and internationally, including the current conflict between Russia and Ukraine, as discussed elsewhere in this Annual Report on Form 10-K, and the ultimate impact of the COVID-19 pandemic.
Factors and Trends Impacting our Business We believe that the following factors and trends are important in understanding our financial performance: • Global economic conditions —Our results of operations are materially affected by conditions in the economy generally, in North America, Brazil, and internationally, including the current conflict between Russia and Ukraine and other geopolitical events in the Middle East, as discussed elsewhere in this Annual Report on Form 10-K, and the ultimate impact of the COVID-19 pandemic.
Estimates critical to our evaluation of goodwill for impairment include forecasts for revenues, net, and earnings before interest, taxes, depreciation and amortization (EBITDA) growth, and long-term growth rates, as well as the discount rates. If the carrying amount of the reporting unit is greater than its fair value, a goodwill impairment loss is recognized.
Estimates critical to our evaluation of goodwill for impairment include forecasts for revenues, net, and earnings before interest, taxes, depreciation and amortization (EBITDA) growth, and the discount rates. If the carrying amount of the reporting unit is greater than its fair value, a goodwill impairment loss is recognized.
In many instances, they lack the proper tools to monitor what is being purchased, and employ manual, paper-based, disparate processes and methods to both approve and make payments for their purchases.
In many instances, businesses lack the proper tools to monitor what is being purchased, and employ manual, paper-based, disparate processes and methods to both approve and make payments for their business-to-business purchases.
Approxi mately 61%, and 63% of our revenue in 2022 and 2021, respectively, was derived in U.S. dollars and was not affected by foreign currency exchange rates. See “Results of Operations” for information related to foreign currency impact on our total revenue, net.
Approxi mately 57%, and 61% of our revenue in 2023 and 2022, respectively, was derived in U.S. dollars and was not affected by foreign currency exchange rates. See “Results of Operations” for information related to foreign currency impact on our total revenue, net.
We provide our payment solutions to our business, merchant, consumer and payment network customers in more than 165 countries around the world today, although we operate primarily in three geographies, with approximately 85% of our business in the U.S., Brazil, and the U.K.
We provide our payment solutions to our business, merchant, consumer and payment network customers in more than 150 countries around the world today, although we operate primarily in three geographies, with approximately 83% of our business in the U.S., Brazil, and the U.K.
We believe that our current level of cash and borrowing capacity under our Credit Facility and Securitization Facility (each defined below), together with expected future cash flows from operations, will be sufficient to meet the needs of our existing operations and planned requirements for the foreseeable future, based on our current assumptions.
Sources of liquidity. We believe that our current level of cash and borrowing capacity under our Credit Facility and Securitization Facility (each defined below), together with expected future cash flows from operations, will be sufficient to meet the needs of our existing operations and planned requirements for the next 12 months and the foreseeable future, based on our current assumptions.
The impact of acquisitions has, and may continue to have, a significant impact on our results of operations and may make it difficult to compare our results between periods. • Interest rates —From January 1, 2022 to February 13, 2023, the U.S.
The impact of acquisitions has, and may continue to have, a significant impact on our results of operations and may make it difficult to compare our results between periods. • Interest rates —From January 1, 2022 to July 23, 2023, the U.S.
One of the remaining contracts matured on January 31, 2023 and the other will mature on December 19, 2023.
One of the remaining contracts matured on January 31, 2023 and the other matured on December 19, 2023.
Refer to the Financial Instruments-Credit Losses section in the Summary of Significant Accounting Policies foot note on page 6 3 of this Form 10-K for additional information. 48 Impairment of goodwill and indefinite-lived assets. We complete an impairment test of goodwill at least annually or more frequently if facts or circumstances indicate that goodwill might be impaired.
Refer to the Financial Instruments-Credit Losses section in the Summary of Significant Accounting Policies footnote on page 67 of this Form 10-K for additional information. Impairment of goodwill and indefinite-lived assets. We complete an impairment test of goodwill at least annually or more frequently if facts or circumstances indicate that goodwill might be impaired.
We have unamortized debt issuance costs of $4.6 million related to the revolving credit facility as of December 31, 2022 recorded in other assets within the Consolidated Balance Sheets.
We have unamortized debt issuance costs of $3.6 million related to the revolving credit facility as of December 31, 2023 recorded in other assets within the Consolidated Balance Sheets.
These factors affected our businesses in each of our segments. • Foreign currency changes —Our results of operations are significantly impacted by changes in foreign currency exchange rates; namely, by movements of the Australian dollar, Brazilian real, British pound, Canadian dollar, Czech koruna, euro, Mexican peso, New Zealand dollar and Russian ruble, relative to the U.S. dollar.
These factors affected our businesses in each of our segments. • Foreign currency changes —Our results of operations are significantly impacted by changes in foreign currency exchange rates; namely, by movements of the Australian dollar, Brazilian real, British pound, Canadian dollar, Czech koruna, euro, Mexican peso, New Zealand dollar and Russian ruble (for periods prior to the disposition or our Russia business), relative to the U.S. dollar.
We also utilize an accounts receivable Securitization Facility to finance a portion of our domestic receivables, to lower our cost of borrowing and more efficiently use capital. Accounts receivable collateralized within our Securitization Facility relate to trade receivables resulting primarily from charge card activity in the U.S.
We also utilize the Securitization Facility to finance a portion of our domestic receivables, to lower our cost of borrowing and more efficiently use capital. Accounts receivable collateralized within our Securitization Facility relate to trade receivables resulting primarily from charge card activity in Vehicle Payments and receivables related to our Lodging Payments business in the U.S.
Set forth below are adjusted net income and adjusted net income per diluted share for the years ended December 31, 2022 and 2021 (in millions, except per share amounts).
Set forth below are adjusted net income, adjusted net income per diluted share, EBITDA and EBITDA margin for the years ended December 31, 2023 and 2022 (in millions, except per share amounts).
Reconciliation of Non-GAAP Revenue and Key Performance Metric by Solution to GAAP .
Reconciliation of Non-GAAP Revenue and Key Performance Metric by Segment to GAAP .
At December 31, 2022, we had $3.0 billion in borrowings outstanding on term loan A, net of discounts, $1.9 billion in borrowings outstanding on term loan B, net of discounts, and $0.9 billion in borrowings outstanding on the revolving credit facility.
At December 31, 2023, we had $2.9 billion in borrowings outstanding on term loan A, net of discounts, $1.8 billion in borrowings outstanding on term loan B, net of discounts, and $0.7 billion in borrowings outstanding on the revolving credit facility.
Our payment solutions are primarily focused on specific commercial spend categories, including Fuel, Corporate Payments, Tolls and Lodging, as well as Gift solutions (stored value cards and e-cards). We provide solutions that help businesses of all sizes control, simplify and secure payment of various domestic and cross-border payables using specialized payment products.
Our payment solutions are primarily focused on specific commercial spend or geographically-defined categories, including Vehicle Payments, Corporate Payments, Lodging Payments and Other (stored value cards and e-cards). We provide solutions that help businesses of all sizes control, simplify and secure payment of various domestic and cross-border payables using specialized payment products.
We have unamortized debt discounts and debt issuance costs of $23.9 million related to the term loans as of December 31, 2022 recorded in notes payable and other obligations, net of current potion within the Consolidated Balance Sheets.
We have unamortized debt discounts and debt issuance costs of $19.0 million related to the term loans as of December 31, 2023 recorded in notes payable and other obligations, net of current portion within the Consolidated Balance Sheets.
The objective of these swap contracts is 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 and/or SOFR benchmark interest rate.
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.
We include any estimated interest and penalties on tax related matters in income tax expense. Refer to the Income Taxes footno te on page 87 of thi s Form 10-K for additional information. Business combinations.
We include any estimated interest and penalties on tax related matters in income tax expense. Refer to the Income Taxes footnote on page 89 of this Form 10-K for additional information. Business combinations.
Refer to the Impa irment of long-lived assets, intangibles and investments section in the Summary of Significant Accounting Policies footnote on page 6 4 of this Form 10-K and the Goodwill and Other Intangible Assets footnote on page 82 of this Form 10-K for addi tional information. Income taxes. We account for income taxes under the asset and liability method.
Refer to the Impairment of long-lived assets, intangibles and investments section in the Summary of Significant Accounting Policies footnote on page 68 of this Form 10-K and the Goodwill and Other Intangible Assets footnote on page 84 of this Form 10-K for additional information. Income taxes. We account for income taxes under the asset and liability method.
We have determined that outside basis differences associated with our investments in foreign subsidiaries would not result in a material deferred tax liability, and, consistent with our assertion that these amounts continue to be indefinitely invested, have not recorded incremental income taxes for the additional outside basis differences.
We have determined that outside basis differences associated with our investments in foreign subsidiaries would not result in a material deferred tax liability, and, consistent with our assertion that these amounts continue to be indefinitely invested, have not recorded incremental income taxes for the additional outside basis differences. 46 Cash flows The following table summarizes our cash flows for the years ended December 31, 2023 and 2022.
Capital spending summary Our capital expenditures were $151.4 million in 2022, an i ncrease of 35.8%, compared to the prior year due to the impact of acquisitions and continue d investments in technology.
Capital spending summary Our capital expenditures were $153.8 million in 2023, an i ncrease of 1.6%, compared to the prior year due to the impact of acquisitions and continue d investments in technology.
As of December 31, 2022, we were in compliance with each of the covenants under the Credit Agreement. Cash Flow Hedges On January 22, 2019, we entered into three interest rate swap contracts. One contract (which matured in January 2022) had a notional value of $1.0 billion, while the two remaining contracts each have a notional value of $500 million.
As of December 31, 2023, we had no borrowings outstanding under the committed credit facility. 48 Cash Flow Hedges On January 22, 2019, we entered into three interest rate swap contracts. One contract (which matured in January 2022) had a notional value of $1.0 billion, while the two remaining contracts each had a notional value of $500 million.
In February 2023, to further manage the impact of the current interest rate environment, we entered into a cross-currency interest rate swap on $500 million of notional value of investments in various euro-functional subsidiaries.
In February 2023, to further manage the impact of economic changes in the value of certain foreign-denominated net assets, we entered into a cross currency interest rate swap on $500 million of notional value of investments in various euro-functional subsidiaries.
Our cross-border foreign risk management business aggregates foreign currency exposures arising from customer contracts and economically hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. These contracts are subject to counterparty credit risk. • Fuel prices —Our fleet customers use our products and services primarily in connection with the purchase of fuel.
Our cross-border foreign risk management business aggregates foreign currency exposures arising from customer contracts and economically hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties. These contracts are subject to counterparty credit risk.
Refer to the Debt footnote on page 84 and Leases footnote on page 89 of this Form 10-K for more information. Deferred income tax liabilities as of December 31, 2022 were approximately $527.5 million. Refer to Income Taxes footnote on page 87 of this Form 10-K for more information.
Refer to the Debt footnote on page 86 and Leases footnote on page 91 of this Form 10-K for more information. Deferred income tax liabilities as of December 31, 2023 were approximately $470.2 million. Refer to Income Taxes footnote on page 89 of this Form 10-K for more information.
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.
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. At December 31, 2023, the interest rate on the Securitization Facility was 6.43%.
We primarily earn revenue from fixed fees for access to the network and ancillary services provided. We also earn interchange on certain non-toll products. In our Lodging solutions, we primarily earn revenue from the difference between the amount charged to the customer and the amount paid to the hotel for a given transaction and commissions paid by hotels.
In our Lodging Payments segment, we primarily earn revenue from the difference between the amount charged to the customer and the amount paid to the hotel for a given transaction or based on commissions paid by hotels. We may also charge fees for access to the network and ancillary services provided.
NM - not meaningful Consolidated revenues, net Our consolidated revenues were $3,427.1 million in 2022, an increase of 20.9% compared to the prior year.
NM - not meaningful Consolidated revenues, net Our consolidated revenues were $3,757.7 million in 2023, an increase of 9.6% compared to the prior year.
Although the length, impact and outcome of the ongoing military conflict between Russia and Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions.
Although the length, impact and outcome of the ongoing military conflicts between Russia and Ukraine and within the Middle East are highly unpredictable, these conflicts could lead to significant market and other disruptions.
Federal Open Market Committee has increased the target federal funds rate eight times for a total rate increase of 4.50%. Additional increases are possible in future periods. We are exposed to market risk changes in interest rates on our cash investments and debt, particularly in rising interest rate environments.
Federal Open Market Committee increased the target federal funds rate eleven times for a total rate increase of 5.25%. Additional increases are possible in future periods. We are exposed to market risk changes in interest rates on our debt, particularly in rising interest rate environments, which is partially offset by incremental interest income earned on cash and restricted cash.
At December 31, 2022, we had approximately $2.0 billion in total liquidity, consisting of approximately $0.6 billion available under our Credit Facility (defined below) and unrestricted cash of $1.4 billion.
At December 31, 2023, we had approximately $2.2 billion in total liquidity, consisting of approximately $0.8 billion available under our Credit Facility (defined below) and unrestricted cash of $1.4 billion, a portion of which is required for working capital.
Although we cannot precisely measure the impac t of the macroeconomic environment, in total we estimate it had a positive impact on our consolidated revenue for 2022 over 2021 of approximately $96 million, driven primarily by the favorable impact of fuel prices of approximately $99 million and favorable fuel price spreads of approximately $43 million.
Although we cannot precisely measure the impac t of the macroeconomic environment, in total we believe it had a negative impact on our consolidated revenues for 2023 over 2022, driven primarily by the unfavorable impact of lower fuel prices of approximately $39 million and unfavorable fuel price spreads of approximately $15 million.
Year Ended December 31, (in millions) 2022 2021 Net cash provided by operating activities $ 754.8 $ 1,197.1 Net cash used in investing activities $ (368.3) $ (715.9) Net cash (used in) provided by financing activities $ (311.2) $ 343.9 Operating activities. Net cash provided by operating activities was $754.8 million in 2022, a decrease from $1,197.1 million in 2021.
Year Ended December 31, (in millions) 2023 2022 Net cash provided by operating activities $ 2,101.1 $ 754.8 Net cash used in investing activities $ (380.7) $ (368.3) Net cash used in financing activities $ (898.2) $ (311.2) Operating activities. Net cash provided by operating activities was $2,101.1 million in 2023, an increase from $754.8 million in 2022.
The increase in the provision for income taxes was driven primarily by an increase in pre-tax earnings, less excess tax benefit on stock option exercises, and higher rates paid on certain foreign earnings compared to prior year.
The increase in the provision for income taxes was driven primarily by the increase in income before income taxes, higher foreign withholding taxes and less excess tax benefit on stock option exercises.
For the years ended December 31, 2022 and 2021, our segments generated the following revenues, net (in millions): Year Ended December 31, 2022 2021 Revenues by Segment* Revenues, net % of Total Revenues, net Revenues, net % of Total Revenues, net Fleet $ 1,504.9 44 % $ 1,320.1 47 % Corporate Payments 772.4 23 % 600.0 21 % Lodging 456.5 13 % 309.6 11 % Brazil 442.2 13 % 368.1 13 % Other 251.0 7 % 235.9 8 % Consolidated revenues, net $ 3,427.1 100 % $ 2,833.7 100 % *Columns may not calculate due to rounding.
Revenues, net by segment for the years ended December 31, 2023 and 2022, our segments generated the following revenues, net (in millions): Year Ended December 31, 2023 2022 2021 Revenues by Segment* Revenues, net % of Total Revenues, net Revenues, net % of Total Revenues, net Revenues, net % of Total Revenues, net Vehicle Payments $ 2,005.5 53 % $ 1,950.0 57 % $ 1,690.0 60 % Corporate Payments 981.1 26 % 769.6 22 % 598.2 21 % Lodging Payments 520.2 14 % 456.5 13 % 309.6 11 % Other 250.9 7 % 251.0 7 % 235.9 8 % Consolidated revenues, net $ 3,757.7 100 % $ 3,427.1 100 % $ 2,833.7 100 % *Columns may not calculate due to rounding.
Since the beginning of the Program through December 31, 2022, 26,280,908 shares have been repurchased for an aggregate purchase price of $5.9 billion, leaving the Company up to $1.2 billion of remaining authorization available under the Program for future repurchases in shares of its common stock.
Since the beginning of the Program through December 31, 2023, we have repurchased 28,878,862 shares for an aggregate purchase price of $6.5 billion, leaving us up to $1.6 billion of remaining authorization available under the Program for future repurchases in shares of our common stock.
Results from our Plugsurfing and Russian acquisitions are reported in our Fleet segment from the dates of acquisition. 41 Results of Operations Year ended December 31, 2022 compared to the year ended December 31, 2021 The following table sets forth selected consolidated statements of income for the years ended December 31, 2022 and 2021 (in millions, except percentages)*.
Results of Operations Year ended December 31, 2023 compared to the year ended December 31, 2022 The following table sets forth selected financial information from the consolidated statements of income for the years ended December 31, 2023 and 2022 (in millions, except percentages)*.
Securitization Facility We are a party to a $1.7 billion receivables purchase agreement among FleetCor Funding LLC, as seller, PNC Bank, National Association as administrator, and various purchaser agents, conduit purchasers and related committed purchasers parties thereto. We refer to this arrangement as the Securitization Facility. There have been multiple amendments to the Securitization Facility in 2022.
As of December 31, 2023, we were in compliance with each of the covenants under the Credit Agreement. Securitization Facility We are a party to a $1.7 billion receivables purchase agreement among FleetCor Funding LLC, as seller, PNC Bank, National Association as administrator, and various purchaser agents, conduit purchasers and related committed purchasers parties thereto (the "Securitization Facility").
Year Ended December 31, 2022 2021 Adjusted net income $ 1,237 $ 1,110 Adjusted net income per diluted share $ 16.10 $ 13.21 Adjusted net income and adjusted net income per diluted share are supplemental non-GAAP financial measures of operating performance.
Year Ended December 31, 2023 2022 Adjusted net income $ 1,259 $ 1,237 Adjusted net income per diluted share $ 16.92 $ 16.10 EBITDA $ 1,994 $ 1,769 EBITDA margin 53.1 % 51.6 % Adjusted net income, adjusted net income per diluted share, EBITDA and EBITDA margin are supplemental non-GAAP financial measures of operating performance.
This swap matures in February 2024. • Expenses —Over the long term, we expect that our expense will decrease as a percentage of revenue as our revenue increases, except for expenses related to transaction volume processed.
See "Liquidity" section below for additional information regarding our derivatives. • Expenses —Over the long term, we expect that our expense will decrease as a percentage of revenue as our revenue increases, except for expenses related to transaction volume processed.
Critical Accounting Policies and Estimates, Adoption of New Accounting Standards, and Pending Adoption of Recently Issued Accounting Standards In applying the accounting policies that we use to prepare our consolidated financial statements, we necessarily make accounting estimates that affect our reported amounts of assets, liabilities, revenue and expenses.
We do not expect reductions to unrecognized income tax benefits within the next 12 months as a result of projected resolutions of income tax uncertainties. 50 Critical Accounting Policies and Estimates, Adoption of New Accounting Standards, and Pending Adoption of Recently Issued Accounting Standards In applying the accounting policies that we use to prepare our consolidated financial statements, we necessarily make accounting estimates that affect our reported amounts of assets, liabilities, revenue and expenses.
Set forth below are revenues, net, net income and net income per diluted share for the years ended December 31, 2022 and 2021 (in millions, except per share amounts).
Our assets in Russia were approximately 3.2% of our consolidated assets at December 31, 2022. Results Revenues, net, Net Income and Net Income Per Diluted Share. Set forth below are revenues, net, net income and net income per diluted share for the years ended December 31, 2023 and 2022 (in millions, except per share amounts).
Our programs may also charge fixed fees for access to the network and ancillary services provided. In our cross-border payments business, the majority of revenue is from exchanges of currency at spot rates, which enables customers to make cross-currency payments.
In our cross-border payments business, the majority of revenue is from exchanges of currency at spot rates, which enables customers to make cross-currency payments.
Revenues, net by geography and solution category for the years ended December 31, 2022 and 2021, were as follows (in millions): Year Ended December 31, 2022 2021 Revenues by Geography* Revenues, net % of total revenues, net Revenues, net % of total revenues, net United States $ 2,093.9 61 % $ 1,785.2 63 % Brazil 442.2 13 % 368.1 13 % United Kingdom 363.3 11 % 321.8 11 % Other 527.7 15 % 358.6 13 % Consolidated revenues, net $ 3,427.1 100 % $ 2,833.7 100 % *Columns may not calculate due to rounding.
Revenues, net, by Geography Revenues, net by geography for the years ended December 31, 2023 and 2022, were as follows (in millions): Year Ended December 31, 2023 2022 Revenues by Geography* Revenues, net % of total revenues, net Revenues, net % of total revenues, net United States $ 2,134.7 57 % $ 2,093.9 61 % Brazil 525.1 14 % 442.2 13 % United Kingdom 441.4 12 % 363.3 11 % Other 656.5 17 % 527.7 15 % Consolidated revenues, net $ 3,757.7 100 % $ 3,427.1 100 % *Columns may not calculate due to rounding. 39 Revenues, net, by Key Performance Metric and Organic Growth.
Set forth below is a reconciliation of adjusted net income and adjusted net income per diluted share to the most directly comparable GAAP measure, net income and net income per diluted share (in thousands, except per share amounts)*: Year Ended December 31, (Unaudited) 2022 2021 Net income $ 954,327 $ 839,497 Net income per diluted share $ 12.42 $ 9.99 Stock-based compensation 121,416 80,071 Amortization 1 238,020 215,456 Loss on extinguishment of debt 1,934 16,194 Integration and deal related costs 18,895 30,632 Restructuring and related costs (subsidies) 6,690 (2,112) Legal settlements/litigation 6,051 5,772 Total pre-tax adjustments 393,006 346,013 Income taxes 2 (110,634) (75,703) Adjusted net income $ 1,236,699 $ 1,109,807 Adjusted net income per diluted share $ 16.10 $ 13.21 Diluted shares 76,862 84,061 1 Includes amortization related to intangible assets, premium on receivables, deferred financing costs and debt discounts. 2 Includes $9 million adjustment for tax benefit of certain income determined to be permanently invested in Q2 2022. * Columns may not calculate due to rounding. 53
Set forth below is a reconciliation of adjusted net income and adjusted net income per diluted share to the most directly comparable GAAP measure, net income and net income per diluted share (in thousands, except per share amounts)*: Year Ended December 31, (Unaudited) 2023 2022 Net income $ 981,890 $ 954,327 Net income per diluted share $ 13.20 $ 12.42 Stock-based compensation 116,086 121,416 Amortization 1 233,870 238,020 Loss on extinguishment of debt — 1,934 Integration and deal related costs 30,660 18,895 Restructuring, related and other costs 2 3,825 6,690 Legal settlements/litigation 2,750 6,051 Gain on disposition of business (13,712) — Total pre-tax adjustments 373,479 393,006 Income taxes 3 (96,781) (110,634) Adjusted net income $ 1,258,588 $ 1,236,699 Adjusted net income per diluted share $ 16.92 $ 16.10 Diluted shares 74,387 76,862 1 Includes amortization related to intangible assets, premium on receivables, deferred financing costs and debt discounts. 2 Includes impact of foreign currency transactions; prior amounts were not material for recast ($1.7 million loss for the year). 3 Includes $9 million adjustment for tax benefit of certain income determined to be permanently invested in Q2 2022.
We estimate approximately 13% and 12% of revenues, net were directly impacted by changes in fuel price in 2022 and 2021, respectively. • Fuel price spread volatility —A portion of our revenue involves transactions where we derive revenue from fuel price spreads, which is the difference between the price charged to a fleet customer for a transaction and the price paid to the merchant for the same transaction.
See "Results of Operations" for information related to the fuel price impact on our total revenues, net. • Fuel price spread volatility —A portion of our revenue involves transactions where we derive revenue from fuel price spreads, which is the difference between the price charged to a fleet customer for a transaction and the price paid to the merchant for the same transaction.
We estimate approximately 6% and 5% of revenues, net were directly impacted by fuel price spreads in 2022 and 2021, respectively. • Acquisitions —Since 2002, we have completed o ver 95 acquis itions of companies and commercial account portfolios.
We estimate approximately 5% and 6% of revenues, net were directly impacted by fuel price spreads in 2023 and 2022, respectively. See "Results of Operations" for information related to the fuel price impact on our total revenues, net. • Acquisitions —Since 2002, we have completed over 95 acquisitions of companies and commercial account portfolios.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+1 added−2 removed12 unchanged
Biggest changeSee Note 11 of the accompanying consolidated financial statements for information about the Credit Agreement. We use derivative financial instruments to reduce our exposure related to changes in interest rates.
Biggest changeSee Note 11 of the accompanying consolidated financial statements for information about the Credit Agreement. We use derivative financial instruments to reduce our exposure related to changes in interest rates. As of December 31, 2023, we had a number of receive-variable SOFR, pay-fixed interest rate swap derivative contracts with a cumulative notional U.S. dollar value of $4.0 billion.
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.
The fuel price that we charge to our customer is dependent on several factors including, among others, the fuel price 56 paid to the fuel merchant, posted retail fuel prices and competitive fuel prices.
We experience fuel price spread contraction 54 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.
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. 55
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. 57
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, 2021 by approximately $48.0 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, 2022 by approximately $68.4 million had the U.S. dollar exchange rate increased or decreased relative to the currencies to which we had exposure.
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, 2022 by approximately $68.4 million had the U.S. dollar exchange rate increased or decreased relative to the currencies to which we had exposure.
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, 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.
Revenues from our international businesses were 38.9% and 37.0% of total revenues for the years ended December 31, 2022, and 2021, 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.
Revenues from our international businesses were 43.2% and 38.9% of total revenues for the years ended December 31, 2023, and 2022, 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.
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, 2022, and 2021, we had $5.8 billion and $4.9 billion, respectively, of variable rate debt outstanding under our Credit Agreement.
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, 2023, and 2022, we had $5.4 billion and $5.7 billion, respectively, of variable rate debt outstanding under our Credit Agreement.
Based on the amounts and mix of our fixed and floating rate debt (exclusive of our Securitization Facility) at December 31, 2022 and 2021, if market interest rates had increased or decreased an average of 100 basis points, our interest expense for the years ended December 31, 2022 and 2021 would have changed by approximately $43 million and $29 million, respectively.
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, 2023 and 2022, if market interest rates had increased or decreased an average of 100 basis points, our interest expense for the years ended December 31, 2023 and 2022 would have changed by approximately $14 million and $43 million, respectively.
Removed
In January 2019, we entered into three interest rate swap cash flow contracts with U.S. dollar notional amounts of $1 billion with a fixed rate of 2.56%, $500 million with a fixed rate of 2.56%, and $500 million with a fixed rate of 2.55% maturing on January 31, 2022, January 31, 2023 and December 19, 2023, respectively.
Added
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.
Removed
For each of these swap contracts, we receive one month LIBOR.

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