CORPAY INC

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited consolidated financial statements and related notes appearing elsewhere in this report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences include, but are not limited to, those identified below and those described in Item 1A "Risk Factors" appearing in our Annual Report on Form 10-K for the year ended December 31, 2023 and in Part II, Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q. 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.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited consolidated financial statements and related notes appearing elsewhere in this report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences include, but are not limited to, those identified below and those described in Item 1A "Risk Factors" appearing in our Annual Report on Form 10-K for the year ended December 31, 2023. 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.

Previous wording

The following discussion and analysis of our financial condition and results of operations generally discusses the three months ended March 31, 2024 and 2023, with period-over-period comparisons between these periods. A detailed discussion of 2023 items and period-over-period comparisons between the three months ended March 31, 2023 and 2022 that are not included in this Quarterly Report on Form 10-Q can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.

Current wording

The following discussion and analysis of our financial condition and results of operations generally discusses the three and six months ended June 30, 2024 and 2023, with period-over-period comparisons between these periods. A detailed discussion of 2023 items and period-over-period comparisons between the three and six months ended June 30, 2023 and 2022 that are not included in this Quarterly Report on Form 10-Q can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

Previous wording

Effective March 25, 2024, FLEETCOR Technologies, Inc. changed its corporate name to Corpay, Inc. At that time, the Company ceased trading under the ticker symbol "FLT" and began trading under our new ticker symbol, "CPAY," on the New York Stock Exchange ("NYSE") effective March 25, 2024. Corpay is a global corporate payments company that helps businesses and consumers better manage and control their expenses. Corpay's suite of modern payment solutions help customers better manage vehicle-related expenses (e.g., fueling, tolls and parking), lodging expenses (e.g., hotel bookings) and corporate payments (e.g., domestic and international vendors). This results in our customers saving time and ultimately spending less. Since its incorporation in 2000, Corpay's payment and spend management solutions have been delivered in a variety of ways depending on the needs of the customer. From physical payment cards to software that includes customizable controls and robust payment capabilities, we provide businesses with a better way to pay.

Current wording

Effective March 25, 2024, FLEETCOR Technologies, Inc. changed its corporate name to Corpay, Inc. At that time, we ceased trading under the ticker symbol "FLT" and began trading under our new ticker symbol, "CPAY," on the New York Stock Exchange ("NYSE") effective March 25, 2024. Corpay is a global corporate payments company that helps businesses and consumers better manage, pay, and control their expenses. Corpay's suite of modern payment solutions help customers better manage vehicle-related expenses (e.g., fueling, tolls and parking), lodging expenses (e.g., hotel and extended stay bookings) and corporate payments (e.g., multi-card and domestic and international vendors). This results in our customers saving time and ultimately spending less. Since its incorporation in 2000, Corpay's payment and spend management solutions have been delivered in a variety of ways depending on the needs of the customer. From physical payment cards to software that includes customizable controls and robust payment capabilities, we provide businesses with a better way to pay.

Previous wording

The current military conflicts between Russia and Ukraine, as well as within the Middle East continue to create substantial uncertainty about the global economy in the future. Although the length, impact and outcome of the ongoing military conflicts are highly unpredictable, these conflicts could lead to significant market and other disruptions. We have recently exited the Russia market via the disposition of our Russia business, which closed in the third quarter of 2023 (see "Russia Disposition" section below), and we do not have material operations in Israel or Gaza. 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.

Current wording

The current military conflicts between Russia and Ukraine, as well as within the Middle East continue to create substantial uncertainty about the global economy in the future. Although the length, impact and outcome of the ongoing military conflicts are highly unpredictable, these conflicts could lead to significant market and other disruptions. We exited the Russia market via the disposition of our Russia business, which closed in the third quarter of 2023 (see "Russia Disposition" section below), and we do not have material operations in Israel or Gaza. 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.

Previous wording

We completed the sale of our Russia business on August 15, 2023. The sale included the entirety of our operations in Russia and resulted in a complete exit from the Russia market. Our business in Russia accounted for approximately $24.5 million of our consolidated income before income taxes for the three months ended March 31, 2023. The Russia business was historically reported within our Vehicle Payments segment.

Current wording

We completed the sale of our Russia business on August 15, 2023. The sale included the entirety of our operations in Russia and resulted in a complete exit from the Russia market. Our business in Russia accounted for approximately $49.8 million of our consolidated income before income taxes for the six months ended June 30, 2023. The Russia business was historically reported within our Vehicle Payments segment.

Previous wording

Revenues, net, Net Income Attributable to Corpay and Net Income Per Diluted Share Attributable to Corpay. Set forth below are revenues, net, net income attributable to Corpay and net income per diluted share attributable to Corpay for the three months ended March 31, 2024 and 2023, (in millions, except per share amounts).

Current wording

Revenues, net, Net Income Attributable to Corpay and Net Income Per Diluted Share Attributable to Corpay. Set forth below are revenues, net, net income attributable to Corpay and net income per diluted share attributable to Corpay for the three and six months ended June 30, 2024 and 2023, (in millions, except per share amounts).

Previous wording

Adjusted Net Income Attributable to Corpay, Adjusted Net Income Per Diluted Share Attributable to Corpay, EBITDA and EBITDA margin. Set forth below are adjusted net income, adjusted net income per diluted share, EBITDA and EBITDA margin for the three months ended March 31, 2024 and 2023 (in millions, except per share amounts).

Current wording

Adjusted Net Income Attributable to Corpay, Adjusted Net Income Per Diluted Share Attributable to Corpay, EBITDA and EBITDA margin. Set forth below are adjusted net income, adjusted net income per diluted share, EBITDA and EBITDA margin for the three and six months ended June 30, 2024 and 2023 (in millions, except per share amounts).

Previous wording

Corpay offers a variety of payment solutions that simplify, automate, secure, digitize and effectively control the way businesses and consumers manage and pay their expenses. 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 83% of our revenues generated in the U.S., Brazil, and the U.K. Our customers may include commercial businesses (obtained through direct and indirect channels) and partners for whom we manage payment programs, as well as individual consumers.

Current wording

Corpay offers a variety of payment solutions that simplify, automate, secure, digitize and effectively control the way businesses and consumers manage and pay their expenses. 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 82% of our revenues generated in the U.S., Brazil, and the U.K. Our customers may include commercial businesses (obtained through direct and indirect channels) and partners for whom we manage payment programs, as well as consumers.

Previous wording

Revenues, net, by Segment. For the three months ended March 31, 2024 and 2023, our segments generated the following revenue (in millions).

Current wording

Revenues, net, by Segment. For the three and six months ended June 30, 2024 and 2023, our segments generated the following revenue (in millions).

Previous wording

We generate revenue in our Vehicle Payments segment through a variety of program fees, including transaction fees, card fees, network fees and charges, as well as from interchange. These fees may be charged as fixed amounts, costs plus a mark-up, based on a percentage of the transaction purchase amounts, or a combination thereof. Our programs also include other fees and charges associated with late payments and based on customer credit risk.

Current wording

We generate revenue in our Vehicle Payments segment through a variety of program fees, including transaction fees, card fees, network fees and charges, as well as from interchange. These fees may be charged as fixed amounts, costs plus a mark-up, based on a percentage of the transaction purchase amounts, or a combination thereof. Our programs also include other fees and charges associated with late payments and based on customer credit risk. We also generate float revenue earned on invested customer funds in jurisdictions where permitted.

Previous wording

In our Corporate Payments segment, our payables business primarily earns revenue from the difference between the amount charged to the customer and the amount paid to the third party for a given transaction, as interchange or spread revenue. 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. Our cross-border payments business also derives revenue from our risk management business, which 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. Revenues from risk management products and foreign exchange payment services are primarily comprised of the difference between the exchange rate we set for the customer and the rate available in the wholesale foreign exchange market.

Current wording

In our Corporate Payments segment, our payables business primarily earns revenue from the difference between the amount charged to the customer and the amount paid to the third party for a given transaction, as interchange or spread revenue. 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. Our cross-border payments business also derives revenue from our risk management business, which 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. Revenues from risk management products and foreign exchange payment services are primarily comprised of the difference between the exchange rate we set for the customer and the rate available in the wholesale foreign exchange market. We also generate float revenue earned on invested customer funds in jurisdictions where permitted.

Previous wording

Revenues, net, by Geography. Revenues, net by geography for the three months ended March 31, 2024 and 2023, were as follows (in millions):

Current wording

Revenues, net, by Geography. Revenues, net by geography for the three and six months ended June 30, 2024 and 2023, were as follows (in millions):

Previous wording

3 Represents total tag subscription transactions in the quarter. Average monthly tag subscriptions for 2024 is 7.1 million

Current wording

3 Represents total tag subscription transactions in the period. Average monthly tag subscriptions for 2024 is 7.1 million

Previous wording

•Other expense, net—Our other expense, net includes gains or losses from the following: sales of assets or businesses, foreign currency transactions, extinguishment of debt, and investments. This category also includes other miscellaneous non-operating costs and revenue. Certain of these items may be presented separately on the Consolidated Statements of Income.

Current wording

•Other expense (income), net—Our other expense (income), net includes gains or losses from the following: sales of assets or businesses, foreign currency transactions, extinguishment of debt, and investments. This category also includes other miscellaneous non-operating costs and revenue. Certain of these items may be presented separately on the Consolidated Statements of Income.

Previous wording

•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 of our Russian business), relative to the U.S. dollar. Approximately 54% and 57% of our revenue in the three months ended March 31, 2024 and 2023, 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.

Current wording

•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 of our Russian business), relative to the U.S. dollar. Approximately 54% and 57% of our revenue in the six months ended June 30, 2024 and 2023, 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.

Previous wording

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.

Current wording

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 and liquidity risk from collateral calls.

Previous wording

•Fuel price volatility—Our vehicle payments customers use our products and services primarily in connection with the purchase of fuel. Accordingly, our revenue is affected by fuel prices, which are subject to significant volatility. A change in retail fuel prices could cause a decrease or increase in our revenue from several sources, including fees paid to us based on a percentage of each customer’s total purchase. Changes in the absolute price of fuel may also impact unpaid account balances and the late fees and charges based on these amounts. We estimate approximately 8% and 12% of revenues, net were directly impacted by changes in fuel price in the three months ended March 31, 2024 and

Current wording

•Fuel price volatility—Our Vehicle Payments customers use our products and services primarily in connection with the purchase of fuel. Accordingly, our revenue is affected by fuel prices, which are subject to significant volatility. A change in retail fuel prices could cause a decrease or increase in our revenue from several sources, including fees paid to us based on a percentage of each customer’s total purchase. Changes in the absolute price of fuel may also impact unpaid account balances and the late fees and charges based on these amounts. We estimate approximately 8% and

Previous wording

2023, respectively. See "Results of Operations" for information related to the fuel price impact on our total revenues, net.

Current wording

11% of revenues, netwere directly impacted by changes in fuel price in thesix months ended June 30, 2024 and 2023, respectively. See "Results of Operations" for information related to the fuel price impact on our total revenues, net.

Previous wording

•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. 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. The fuel price that we charge to our customer is dependent on several factors including, among others, the fuel price paid to the merchant, posted retail fuel prices and competitive fuel prices. We experience fuel price spread contraction when the merchant’s wholesale cost of fuel increases at a faster rate than the fuel price we charge to our customers, or the fuel price we charge to our customers decreases at a faster rate than the merchant’s wholesale cost of fuel. The inverse of these situations produces fuel price spread expansion. We estimate approximately 5% of revenues, net were directly impacted by fuel price spreads in the three months ended March 31, 2024 and 2023. See "Results of Operations" for information related to the fuel price spread impact on our total revenues, net.

Current wording

•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. 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. The fuel price that we charge to our customer is dependent on several factors including, among others, the fuel price paid to the merchant, posted retail fuel prices and competitive fuel prices. We experience fuel price spread contraction when the merchant’s wholesale cost of fuel increases at a faster rate than the fuel price we charge to our customers, or the fuel price we charge to our customers decreases at a faster rate than the merchant’s wholesale cost of fuel. The inverse of these situations produces fuel price spread expansion. We estimate approximately 5% of revenues, net were directly impacted by fuel price spreads in the six months ended June 30, 2024 and 2023. See "Results of Operations" for information related to the fuel price spread impact on our total revenues, net.

Previous wording

•Interest rates—From January 1, 2022 to July 27, 2023, the U.S. 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. As of March 31, 2024, we have 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 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.

Current wording

•Interest rates—From January 1, 2022 to July 27, 2023, the U.S. Federal Open Market Committee increased the target federal funds rate eleven times for a total rate increase of 5.25%. Additional rate changes 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. As of June 30, 2024, we have 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 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.

Previous wording

•Taxes—We pay taxes in various taxing jurisdictions, including the U.S., most U.S. states and many non-U.S. jurisdictions. The tax rates in non-U.S. taxing jurisdictions are different than the U.S. tax rate. Consequently, as our earnings fluctuate between taxing jurisdictions, our effective tax rate fluctuates.

Current wording

•Taxes—We pay taxes in various taxing jurisdictions, including the U.S., most U.S. states and many non-U.S. jurisdictions. The tax rates in non-U.S. taxing jurisdictions are different than the U.S. tax rate. Consequently, as our earnings fluctuate between taxing jurisdictions, our effective tax rate fluctuates. Our effective tax rate is also subject to fluctuations driven by the impact of discrete tax items.

Previous wording

•In March 2024, we acquired 70% of Zapay, a Brazil-based digital mobility solution for paying vehicle-related taxes and compliance fees, for approximately $56.3 million, net of cash. As part of the agreement, we have the right to acquire the remainder of Zapay in four years. The majority investment in Zapay further scales our Vehicle Payments business in Brazil.

Current wording

•In March 2024, we acquired 70% of Zapay, a Brazil-based digital mobility solution for paying vehicle-related taxes and compliance fees, for approximately $59.5 million, net of cash. As part of the agreement, we have the right to acquire the remainder of Zapay in four years. The majority investment in Zapay further scales our Vehicle Payments business in Brazil.

Previous wording

•In September 2023, we acquired PayByPhone Technologies, Inc., a global mobile parking payment application, for approximately $301.6 million, net of cash. Results from PaybyPhone are reported in our Vehicle Payments segment.

Current wording

•In September 2023, we acquired PayByPhone Technologies, Inc., a global mobile parking payment application, for approximately $301.9 million, net of cash. Results from PaybyPhone are reported in our Vehicle Payments segment.

Previous wording

Consolidated revenues were$935.3 million in the three months ended March 31, 2024, an increase of 3.8% compared to the prior period. The increase in consolidated revenues was due primarily to organic growth of 6%, driven by increases in spend and transaction volumes, implementation and ramping of new sales and business initiatives. Consolidated revenues also grew 1% from acquisitions completed in 2023 and 2024 and due to the slightly positive impact of the macroeconomic environment but were negatively impacted by approximately$31 million, or 3%, from the disposition of our Russia business in August 2023.

Current wording

Consolidated revenues were$975.7 million in the three months ended June 30, 2024, an increase of 2.9% compared to the prior period. The increase in consolidated revenues was due primarily to organic growth of 6%, driven by increases in spend and transaction volumes, implementation and ramping of new sales, and business initiatives. Consolidated revenues also grew 2% from acquisitions completed in 2023 and 2024, but were negatively impacted by approximately$32 million, or 3%, from the disposition of our Russia business in August 2023 and the impact of the macroeconomic environment.

Previous wording

Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a slightly positive impact on our consolidated revenues for the three months ended March 31, 2024 over the comparable period in 2023, driven primarily byfavorable foreign exchange rates of approximately $14 million mostly in our Brazil and U.K. businesses.

Current wording

Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a negative impact on our consolidated revenues for the three months ended June 30, 2024 over the comparable period in 2023, driven primarily by unfavorable foreign exchange rates of approximately $9 million mostly in our Brazil business. The impact of slightly lower fuel price spreads was offset by the impact of slightly higher fuel prices.

Previous wording

Processing. Processing expenses were $207.4 million in the three months ended March 31, 2024, an increase of 1.2% compared to the prior period. Increases in processing expenses were primarily due to approximately $5 million of expenses related to acquisitions completed in 2023 and 2024, higher variable expenses driven by increased transaction volumes, investments to drive future growth and the unfavorable impact of foreign exchange rates of approximately $3 million. The increases were partially offset by lower bad debt of $15 million due to our shift away from micro-SMB (small-medium business) clients in the U.S. and the impact of the disposition of our Russia business of approximately $1 million.

Current wording

Processing. Processing expenses were $209.2 million in the three months ended June 30, 2024, an increase of 1.9% compared to the prior period. Increases in processing expenses were primarily due to approximately $7 million of expenses related to acquisitions completed in 2023 and 2024, higher variable expenses driven by increased transaction volumes and investments to drive future growth. The increases were partially offset by lower bad debt of $6 million due to our shift away from micro-SMB (small-medium business) clients in the U.S., the favorable impact of foreign exchange rates of approximately $2 million and the impact of the disposition of our Russia business of approximately $2 million.

Previous wording

Selling. Selling expenses were$94.2 million in the three months ended March 31, 2024, an increase of 15.4% from the prior period. Increases in selling expenses were primarily due to increased commissions from higher sales volume, approximately $2 million of expenses related to acquisitions completed in 2023 and 2024 and the slightly unfavorable impact of foreign exchange rates. These increases were offset by the impact of the disposition of our Russia business of approximately $2 million.

Current wording

Selling. Selling expenses were$95.0 million in the three months ended June 30, 2024, an increase of 10.0% from the prior period. Increases in selling expenses were primarily due to increased commissions from higher sales volume and approximately $3 million of expenses related to acquisitions completed in 2023 and 2024. These increases were partially offset by the impact of the disposition of our Russia business of approximately $2 million and the slightly favorable impact of foreign exchange rates.

Previous wording

General and administrative. General and administrative expenses were$151.3 million in the three months ended March 31, 2024, a decrease of 2.2% from the prior period. Thedecrease in general and administrative expenses was primarily due to lower overhead expense due to disciplined expense management and the impact of the disposition of our Russia business of approximately $3 million. These decreases were partially offset by theimpact of acquisitions completed in 2023 and 2024 of approximately$6 million and the slightly unfavorable impact of foreign exchange rates.

Current wording

General and administrative. General and administrative expenses were$153.8 million in the three months ended June 30, 2024, a decrease of 3.5% from the prior period. Thedecrease in general and administrative expenses was primarily due to lower overhead expense due to disciplined expense management, lower stock-based compensation expense of approximately $6 million, the impact of the disposition of our Russia business of approximately $2 million and the slightly favorable impact of foreign exchange rates. These decreases were partially offset by theimpact of acquisitions completed in 2023 and 2024 of approximately$6 million.

Previous wording

Depreciation and amortization. Depreciation and amortization expenses were$84.8 million in the three months ended March 31, 2024, a slight increase of 0.6% from the prior period. Depreciation and amortization expenses increased due to incremental investments in capital expenditures, acquisitions completed in 2023 and 2024 and the slightly unfavorable impact of foreign exchange rates. These increases were offset by the impact of the disposition of our Russia business.

Current wording

Depreciation and amortization. Depreciation and amortization expenses were$84.3 million in the three months ended June 30, 2024, a slight increase of 0.8% from the prior period. Depreciation and amortization expenses increased due to incremental investments in capital expenditures andacquisitions completed in 2023 and 2024. These increases were offset by the impact of the disposition of our Russia business.

Previous wording

Consolidated operating income was $397.3 million in the three months ended March 31, 2024, an increase of 5.9% compared to the prior period. The increase in operating income was primarily due to the reasons discussed above, resulting in EBITDA margin expansion of 53 basis points over the prior period.

Current wording

Consolidated operating income was $433.3 million in the three months ended June 30, 2024, an increase of 5.0% compared to the prior period. The increase in operating income was primarily due to the reasons discussed above, resulting in EBITDA margin expansion of 63 basis points over the prior period.

Previous wording

Other expense, net. Other expense, net was$3.1 million in the three months ended March 31, 2024, which primarily represents the impact of fluctuations in foreign exchange rates on non-functional currency balances.

Current wording

Other expense (income), net. Other expense (income), net was$4.5 million in the three months ended June 30, 2024, which primarily represents the impact of fluctuations in foreign exchange rates on non-functional currency balances.

Previous wording

Interest expense, net. Interest expense, net was $89.1 million in the three months ended March 31, 2024, an increase of $9.3 million from the prior period. The increase in net interest expense was primarily due to rising interest rates on our borrowings and lower interest income due to the sale of our Russia business, partially offset by lower debt balances and higher cash balances in certain foreign jurisdictions. The following table sets forth the average interest rates paid on borrowings under our Credit Facility, excluding the related unused facility fees and swaps.

Current wording

Interest expense, net. Interest expense, net was $94.7 million in the three months ended June 30, 2024, an increase of $6.2 million from the prior period. The increase in net interest expense was primarily due to higher interest rates on increased borrowings and lower interest income due to the sale of our Russia business. The following table sets forth the average interest rates paid on borrowings under our Credit Facility, excluding the related unused facility fees and swaps.

Previous wording

We have a portfolio of interest rate swaps which are designated as cash flow hedges and four cross-currency interest rate swaps, which are designated as one net investment hedge. During the three months ended March 31, 2024, as a result of these swap contracts and net investment hedge, we recorded a benefit to interest expense of $14.7 million.

Current wording

We have a portfolio of interest rate swaps, which are designated as cash flow hedges and cross-currency interest rate swaps, which are designated as net investment hedges. During the three months ended June 30, 2024, as a result of these swap contracts and net investment hedges, we recorded a benefit to interest expense of $15.6 million.

Previous wording

Provision for income taxes. The provision for income taxes and effective tax rate were $75.5 million and 24.7%, respectively, for the three months ended March 31, 2024, compared to $80.0 million and 27.1%, respectively, for the prior period. Income tax expense is based on an estimated annual effective rate, which requires us to make our best estimate of annual pretax accounting income or loss before consideration of tax or benefit discretely recognized in the period in which such occur. Our effective income tax rate for the three months ended March 31, 2024 differs from the U.S. federal statutory rate due primarily to the unfavorable impact of state taxes net of federal benefits, additional taxes on undistributed foreign-sourced income, and foreign withholding taxes on interest income from intercompany notes. For the three months ended March 31, 2024, the effective tax rate decreased due to discrete items of $8.5 million mainly attributable to tax benefits arising from stock option exercises and awards vesting.

Current wording

Provision for income taxes. The provision for income taxes and effective tax rate were $82.5 million and 24.7%, respectively, for the three months ended June 30, 2024, compared to $86.9 million and 26.6%, respectively, for the prior period. Income tax expense is based on an estimated annual effective rate, which requires us to make our best estimate of annual pretax accounting income or loss before consideration of tax or benefit discretely recognized in the period in which such occur. Our effective income tax rate for the three months ended June 30, 2024 differs from the U.S. federal statutory rate due primarily to the unfavorable impact of state taxes net of federal benefits, additional taxes on undistributed foreign-sourced income, and foreign withholding taxes on interest income from intercompany notes. For the three months ended June 30, 2024, the effective tax rate decreased compared to the prior period of $7 million mainly attributable to adjustments of state tax apportionment percentages for prior years.

Previous wording

Net income attributable to Corpay. For the reasons discu ssed above, our net income attributable to Corpay increased to$229.8 million, or 7.0%, from the prior period, during the three months ended March 31, 2024.

Current wording

Net income attributable to Corpay. For the reasons discussed above, our net income attributable to Corpay increased to $251.6 million, or 5.0%, from the prior period, during the three months ended June 30, 2024.

Previous wording

Vehicle Payments operating income was$225.7 million in the three months ended March 31, 2024, an increase of 1.0% compared to the prior period, despite theimpact of the disposition of our Russia business, which resulted in lower operating income of approximately $24 million. This negative impact was more than offset by organic growth described above as well aslower bad debt of approximately $15 million, as we shifted away from micro-SMB clients and to higher credit quality customers in the U.S. in 2023.

Current wording

Vehicle Payments operating income was$242.0 million in the three months ended June 30, 2024, an increase of 4.1% compared to the prior period, despite theimpact of the disposition of our Russia business, which resulted in lower operating income of approximately $25 million. This impact of this disposition was more than offset by organic revenue growth described above, as well as lower bad debt of approximately $11 million, as we shifted away from micro-SMB clients to higher credit quality customers in the U.S. in 2023.

Previous wording

Corporate Payments revenues were$265.4 million in the three months ended March 31, 2024, an increase of 17.3%, from the prior period. Corporate Payments revenues increased primarily due to organic revenue growth of 17%, driven by strong new sales in our AP and cross-border solutions and a slight increase in spend volume.

Current wording

Corporate Payments revenues were$288.5 million in the three months ended June 30, 2024, an increase of 17.3%, from the prior period. Corporate Payments revenues increased primarily due to organic revenue growth of 18%, driven by 19% growth in spend volume and strong new sales in our payables and cross-border solutions.

Previous wording

Corporate Payments operating income was$104.7 million in the three months ended March 31, 2024, an increase of 30.2% from the prior period. Corporate Payments operating income and margin increased primarily due to revenue growth, operating leverage and integration synergies, as revenues grew faster than expenses, partially offset by higher selling expenses driven by growth of the business.

Current wording

Corporate Payments operating income was$120.6 million in the three months ended June 30, 2024, an increase of 26.0% from the prior period. Corporate Payments operating income and margin increased primarily due to organic revenue growth, operating leverage and integration synergies, as revenues grew faster than expenses, partially offset by higher selling expenses incurred to grow the business.

Previous wording

Lodging Payments operating income was$47.3 million in the three months ended March 31, 2024, a decrease of 13.4% from the prior period. Lodging Payments operating income and margin declined due to the reasons discussed above.

Current wording

Lodging Payments operating income was$56.4 million in the three months ended June 30, 2024, a decrease of 17.3% from the prior period. Lodging Payments operating income and margin declined due to the reasons discussed above.

Previous wording

Other operating income was$19.7 million in the three months ended March 31, 2024, an increase of 17% from the prior period, with the increase primarily due to revenue growth and our operating leverage, as revenues grew faster than expenses.

Current wording

Other operating income was$14.4 million in the three months ended June 30, 2024, a decrease of 11% from the prior period, with the decrease primarily due to a decline in the payroll card revenue.