CORPAY INC

Previous 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.

Current wording

The following discussion and analysis of our financial condition and results of operations generally discusses the three and nine months ended September 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 nine months ended September 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 September 30, 2023.

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 $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.

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 $62.0 million of our consolidated income before income taxes for the nine months ended September 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 and six months ended June 30, 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 nine months ended September 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 and six months ended June 30, 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 nine months ended September 30, 2024 and 2023 (in millions, except per share amounts).

Previous 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).

Current wording

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

Previous 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):

Current wording

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

Previous wording

3 Represents total tag subscription transactions in the period. 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 7.2 million

Previous 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.

Current wording

•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. 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

•Global economic conditions—Our results of operations are materially affected by conditions in the economy generally, in North America, Brazil, the U.K., and in other locations internationally, including the current conflict between Russia and Ukraine and other geopolitical events in the Middle East, as discussed elsewhere in this Quarterly Report on Form 10-Q. Factors affected by the economy include our transaction volumes, the credit risk of our customers and changes in tax laws across the globe. These factors affected our businesses in each of our segments.

Current wording

•Global economic conditions—Our results of operations are materially affected by conditions in the economy generally, in North America, Brazil, the U.K., and in other locations internationally. Factors affected by the economy include our transaction volumes, the credit risk of our customers and changes in tax laws across the globe. These factors affected our businesses in each of our segments.

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 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.

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 55% and 57% of our revenue in the nine months ended September 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

•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

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 11% of revenues, netwere directly impacted by changes in fuel price in thenine months ended September 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 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.

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 both the nine months ended September 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 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.

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% and on September 18, 2024 and November 7, 2024, lowered the target federal funds rate by 0.50% and 0.25%, respectively. 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 September 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 $4.5 billion. The objective of these contracts is to reduce the variability of cash flows in the previously unhedged interest payments associated with variable rate debt, the sole source of which is due to changes in SOFR benchmark interest rate.

Previous wording

The Organization for Economic Co-operation and Development (“OECD”), continues to put forth various initiatives, including Pillar Two rules which include the introduction of a global minimum tax at a rate of 15%. European Union member states agreed to implement the OECD’s Pillar Two rules with effective dates of January 1, 2024 and January 1, 2025, for different aspects of the directive and most have already enacted legislation. A number of other countries are also implementing similar legislation. As of June 30, 2024, based on the countries in which we do business that have enacted legislation effective January 1, 2024, the impact of these rules to our financial statements was not material. This may change as other countries enact similar legislation and further guidance is released. We continue to closely monitor regulatory developments to assess potential impacts.

Current wording

The Organization for Economic Co-operation and Development (“OECD”), continues to put forth various initiatives, including Pillar Two rules which include the introduction of a global minimum tax at a rate of 15%. European Union member states agreed to implement the OECD’s Pillar Two rules with effective dates of January 1, 2024 and January 1, 2025, for different aspects of the directive and most have already enacted legislation. A number of other countries are also implementing similar legislation. As of September 30, 2024, based on the countries in which we do business that have enacted legislation effective January 1, 2024, the impact of these rules to our financial statements was not material. This may change as other countries enact similar legislation and further guidance is released. We are currently evaluating the impact of the enacted legislation effective January 1, 2025 to our financial statements and continue to closely monitor regulatory developments to assess potential impacts.

Previous wording

•In July 2024, we acquired 100% of Paymerang, a U.S. based leader in accounts payables automation solutions, for approximately $469 million, net of cash. The acquisition expands our presence in several market verticals, including education, healthcare, hospitality and manufacturing. The results of Paymerang will be reflected in our Corporate Payments segment and financial statements during the third quarter of 2024.

Current wording

•In July 2024, we acquired 100% of Paymerang, a U.S. based leader in accounts payables automation solutions, for approximately $179.2 million, net of cash and cash equivalents and restricted cash acquired of $309 million. The acquisition expands our presence in several market verticals, including education, healthcare, hospitality and manufacturing. Results from Paymerang are reported in our Corporate Payments segment.

Previous wording

Consolidated revenues were $1,911.0 million in the six months ended June 30, 2024, an increase of 3.3% 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, but were negatively impacted by approximately$64 million, or 3%, from the disposition of our Russia business in August 2023 and the negative impact of the macroeconomic environment.

Current wording

Consolidated revenues were $1,029.2 million in the three months ended September 30, 2024, an increase of 6.0% 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 3% from acquisitions completed in 2023 and 2024. This growth was partially offset by approximately $13 million, or 1%, from the disposition of our Russia business in August 2023 and the negative 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 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.

Current wording

Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a negative impact of approximately $14 million on our consolidated revenues for the three months ended September 30, 2024 over the comparable period in 2023. This negative impact was driven primarily by unfavorable foreign exchange rates of approximately

Previous wording

Processing. Processing expenses were $416.6 million in the six months ended June 30, 2024, an increase of 1.6% compared to the prior period. Increases in processing expenses were primarily due to approximately $12 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 $21 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 $3 million.

Current wording

Processing. Processing expenses were $223.7 million in the three months ended September 30, 2024, an increase of 7.4% compared to the prior period. Increases in processing expenses were primarily due to approximately $11 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 the impact of foreign exchange rates of approximately $5 million and lower bad debt of $1 million due to our shift away from micro-SMB (small-medium business) clients in the U.S.

Previous 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.

Current wording

Selling. Selling expenses were$94.2 million in the three months ended September 30, 2024, an increase of 9.5% from the prior period. Increases in selling expenses were primarily due to increased commissions from higher sales volume and approximately $5 million of expenses related to acquisitions completed in 2023 and 2024. These increases were partially offset by the impact of foreign exchange rates of approximately $1 million and the impact of the disposition of our Russia business of approximately $1 million.

Previous 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.

Current wording

General and administrative. General and administrative expenses were$153.7 million in the three months ended September 30, 2024, an increase of 3.9% from the prior period. Theincrease in general and administrative expenses was primarily due to approximately$8 million of expenses related to acquisitions completed in 2023 and 2024. These increases were partially offset by lower stock-based compensation expense of approximately $1 million, the impact of the disposition of our Russia business of approximately $1 million and the impact of foreign exchange rates of approximately $1 million.

Previous wording

Depreciation and amortization. Deprec iation and amortization expenses were$169.1 million in thesix months ended June 30, 2024, an increase of 0.7% 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.

Current wording

Depreciation and amortization. Depreciation and amortization expenses were $89.5 million in the three months ended September 30, 2024, an increase of 5.7% 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 partially offset by the favorable impact of foreign exchange rates of approximately $2 million and the impact of the disposition of our Russia business of approximately $1 million.

Previous 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.

Current wording

Interest expense, net. Interest expense, net was $104.4 million in the three months ended September 30, 2024, an increase of $16.2 million from the prior period. The increase in net interest expense was primarily due to increased borrowings used for acquisitions and share repurchases and lower interest income due to the sale of our Russia business and higher interest rates. 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 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.

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 September 30, 2024, as a result of these swap contracts and net investment hedges, we recorded a benefit to interest expense of $16.6 million.

Previous 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.

Current wording

Provision for income taxes. The provision for income taxes and effective tax rate were $82.0 million and 22.9%, respectively, for the three months ended September 30, 2024, compared to $98.6 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 September 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 September 30, 2024, the effective tax rate decreased compared to the prior period due to discrete items of $15 million mainly due to incremental excess tax benefit on stock option exercises.

Previous 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.

Current wording

Net income attributable to Corpay. For the reasons discussed above, our net income attributable to Corpay increased to $276.4 million, or 1.8%, from the prior period, during the three months ended September 30, 2024.

Previous wording

Vehicle Payments revenues were$510.3 million in the three months ended June 30, 2024, a slight increase of 0.1%. Revenues were negatively impacted by the disposition of our Russia business in August 2023, which lowered revenue by approximately $32 million and the negative impact of the macroeconomic environment of approximately $8 million, driven prim arily by unfavorable changes in foreign exchange rates on revenue of $8 million. Offsetting this decrease was organic revenue growthof 5% driven by new sales growth in our international markets, as well as the impact of acquisitions, which contributed approximately $15 million in revenue.

Current wording

Vehicle Payments revenues were$506.8 million in the three months ended September 30, 2024, an increase of 1.2% from the prior period. Vehicle Payments revenues increased primarily due toorganic revenue growthof 4%, driven by 7% organic increases in transactions and revenue per transaction across certain businesses and geographies, new sales growth in our international markets, the impact of acquisitions, which contributed approximately $10 million in revenue, and favorable fuel price spreads of approximately $8 million. These increases were partially offset by the disposition of our Russia business in August 2023, which lowered revenue by approximately $13 million, unfavorable changes in foreign exchange rates on revenue of $19 million and the unfavorable impact of fuel prices of approximately $5 million.

Previous 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.

Current wording

Vehicle Payments operating income remained relatively constant at $244.3 million in the three months ended September 30, 2024 despite the impact of the disposition of our Russia business, which resulted in lower operating income of approximately $12 million.

Previous 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.

Current wording

Corporate Payments revenues were $321.9 million in the three months ended September 30, 2024, an increase of 24.8% from the prior period. Corporate Payments revenues increased primarily due to organic revenue growth of 18%, driven by 7% growth in spend volume, strong new sales in our payables and cross-border solutions and the impact of our Paymerang acquisition, which contributed approximately $13 million in revenues.

Previous 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.

Current wording

Corporate Payments operating income was $136.9 million in the three months ended September 30, 2024, an increase of 30.5% 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 revenues were $122.4 million in the three months ended June 30, 2024, a decrease of 10.4% from the prior period. The decrease in Lodging Payments revenues was primarily due to a 6% decline in room nights as compared to the prior year, as well as insurance commissions recognized in the prior year that did not recur in 2024.

Current wording

Lodging Payments revenues were $134.0 million in the three months ended September 30, 2024, a decrease of 5.2% from the prior period. The decrease in Lodging Payments revenues was primarily due to insurance commissions recognized in the prior year that did not recur in 2024, offset by an increase in room night volume driven by an improvement in same store sales and weather-driven emergency services.

Previous 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.

Current wording

Lodging Payments operating income was $65.5 million in the three months ended September 30, 2024, a decrease of 11.5% from the prior period. Lodging Payments operating income and margin declined due to the reasons discussed above.

Previous wording

Other revenues were$54.6 million in the three months ended June 30, 2024, a decrease of 2.5% from the prior period, primarily due to lower volume in our payroll card business.

Current wording

Other revenues were $66.5 million in the three months ended September 30, 2024, a decrease of 6.3% from the prior period, due to lower volume in our payroll card business and timing of transactions in our gift business.

Previous wording

The following table sets forth selected unaudited consolidated statements of income for the six months ended June 30, 2024 and 2023 (in millions, except percentages)*.

Current wording

The following table sets forth selected unaudited consolidated statements of income for the nine months ended September 30, 2024 and 2023 (in millions, except percentages)*.

Previous 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.

Current wording

Consolidated revenues were $2,940.1 million in the nine months ended September 30, 2024, an increase of 4.2% 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$77 million, or 3%, from the disposition of our Russia business in August 2023 and the negative 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 negative impact on our consolidated revenues for the six months ended June 30, 2024 over the comparable period in 2023, driven primarily by unfavorable fuel price spreads of approximately $7 million and the unfavorable impact of fuel prices of approximately $3 million, partially offset by favorable foreign exchange rates of approximately $4 million, mostly in our U.K. and Mexico businesses.

Current wording

Although we cannot precisely measure the impact of the macroeconomic environment, in total we believe it had a negative impactof approximately $20 millionon our consolidated revenues for the nine months ended September 30, 2024 over the comparable period in 2023, driven primarily by unfavorable foreign exchange rates of approximately $13 million, mostly in our

Previous 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.

Current wording

Processing. Proce ssing expenses were $640.3 million in the nine months ended September 30, 2024, an increase of 3.5% compared to the prior period. Increases in processing expenses were primarily due to approximately $23 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 $22 million due to our shift away from micro-SMB (small-medium business) clients in the U.S, the impact of foreign exchange rates of approximately $4 million and the impact of the disposition of our Russia business of approximately $3 million.

Previous wording

Selling. Selling expenses were $189.2 million in the six months ended June 30, 2024, an increase of 12.6% from the prior period. Increases in selling expenses were primarily due to increased commissions from higher sales volume and approximately $6 million of expenses related to acquisitions completed in 2023 and 2024. The increases were partially offset by the impact of the disposition of our Russia business of approximately $4 million.

Current wording

Selling. Selling expenses were $283.4 million in the nine months ended September 30, 2024, an increase of 11.6% from the prior period. Increases in selling expenses were primarily due to increased commissions from higher sales volume and approximately $11 million of expenses related to acquisitions completed in 2023 and 2024. The increases were partially offset by the impact of the disposition of our Russia business of approximately $5 million.

Previous wording

General and administrative. General and administrative expenses were $305.0 million in the six months ended June 30, 2024, a decrease of 2.9% from the prior period. The decrease in general and administrative expenses was primarily due to lower overhead expense due to disciplined expense management, lower stock-based compensation expense of approximately $7 million and the impact of the disposition of our Russia business of approximately $5 million. These decreases were partially offset by theimpact of acquisitions completed in 2023 and 2024 of approximately$12 million.

Current wording

General and administrative. General and administrative expenses were $458.7 million in the nine months ended September 30, 2024, a decrease of 0.7% from the prior period. The decrease in general and administrative expenses was primarily due to lower overhead expense due to disci plined expense management, lower stock-based compensation expense of approximately $9 million and the impact of the disposition of our Russia business of approximately $6 million. These decreases were partially offset by theimpact of acquisitions completed in 2023 and 2024 of approximately$20 million.

Previous 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.

Current wording

Depreciation and amortization. Depreciation and amortization expenses were $258.6 million in the nine months ended September 30, 2024, an increase of 2.4% from the prior period. Depreciation and amortization expenses increased due to incremental investments in capital expenditures and approximately $10 million of expenses related toacquisitions completed in 2023 and 2024. These increases were offset by the impact of the disposition of our Russia business of approximately $3 million.

Previous wording

Operating income was $830.7 million in the six months ended June 30, 2024, an increase of 5.4% compared to the prior period. The increase in operating income was primarily due to the reasons discussed above, resulting in EBITDA margin expansion of 58 basis points over the prior period.

Current wording

Operating income was $1,298.8 million in the nine months ended September 30, 2024, an increase of 5.3% compared to the prior period. The increase in operating income was primarily due to the reasons discussed above.