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MasterCard Incorporated Reports Fourth-Quarter and Full-Year 2013 Financial Results

MasterCard Incorporated (NYSE:MA) today announced financial results for the fourth quarter of 2013. Excluding a special item, the company reported net income of $684 million, up 13%, and earnings per diluted share of $0.57 (adjusted for the company’s ten-for-one stock split), up 16%, versus the year-ago period. Including the special item, a $61 million after-tax charge related to the opt-outs in the U.S. merchant litigations, the company reported net income of $623 million, or $0.52 per diluted share. The net income and earnings per diluted share, excluding the special item, are reconciled to their comparable GAAP measures in the accompanying tables.

Net revenue for the fourth quarter of 2013 was $2.1 billion, a 12% increase versus the same period in 2012. Adjusted for currency, net revenue increased 11%. Net revenue growth was driven by the impact of the following:

  • A 14% increase in gross dollar volume, on a local currency basis, to $1.1 trillion;
  • An increase in cross-border volumes of 18%; and
  • An increase in processed transactions of 13%, to 10.4 billion.

These factors were partially offset by an increase in rebates and incentives, primarily due to new and renewed agreements and increased volumes.

Worldwide purchase volume during the quarter was up 12% on a local currency basis versus the fourth quarter of 2012, to $805 billion. As of December 31, 2013, the company’s customers had issued almost 2 billion MasterCard and Maestro-branded cards.

“We are very pleased with our performance this quarter and our full-year 2013 results reflect the overall strength of our global business,” said Ajay Banga, MasterCard president and CEO. “In addition to signing several significant deals last quarter, we made new investments in processing and person-to person payments while expanding our MasterPass digital platform - all supporting safe and seamless payment experiences.”

Excluding the special item, total operating expenses increased 11%, both before and after adjusting for currency, to $1.1 billion for the fourth quarter of 2013 compared to the same period in 2012. The increase was primarily driven by higher investments in people and marketing to support strategic initiatives. Including the special item, total operating expenses increased 21% from the year-ago period.

Operating income for the fourth quarter of 2013 increased 13% over the year-ago period, excluding the special item, and the company delivered an operating margin of 47.7%.

MasterCard reported total other expense of $9 million in the fourth quarter of 2013 versus $5 million in the fourth quarter of 2012. The increase was primarily driven by joint venture-related expenses.

MasterCard's effective tax rate was 32.0% in the fourth quarter of 2013, versus a rate of 32.4% in the comparable period of 2012, excluding the special item. The decrease in the effective tax rate for the period was primarily due to a more favorable geographic mix of earnings and a lower state effective tax rate, partially offset by higher discrete benefits in 2012.

During the fourth quarter of 2013, MasterCard repurchased 9.8 million shares of Class A common stock at a cost of approximately $751 million. Quarter-to-date through January 24th, the company repurchased an additional 4.2 million shares at a cost of approximately $351 million, with $3.3 billion remaining under the current repurchase program authorization.

Full-Year 2013 Results

For the year ended December 31, 2013, MasterCard reported net income of $3.2 billion, up 15%, and earnings per diluted share of $2.61, up 19%, in each case versus the year-ago period and excluding the special items representing charges related to the U.S. merchant litigations taken in both 2012 and 2013. Including the 2013 special item, full-year 2013 net income was $3.1 billion and earnings per diluted share was $2.56.

Net revenue for full-year 2013 was $8.3 billion, an increase of 13% versus 2012 both before and after adjusting for currency. Gross dollar volume growth of 14%, cross-border volume growth of 18% and processed transaction growth of 13%, contributed to the net revenue growth in the full-year period. These increases were partially offset by an increase in rebates and incentives.

Excluding special items in both years, total operating expenses increased 9%, compared to 2012, both before and after adjusting for currency, to $3.7 billion, primarily due to higher personnel costs related to strategic initiatives. Including special items, total operating expenses increased 11%, to $3.8 billion, versus 2012.

Excluding special items, operating income increased 16% for 2013 versus 2012, delivering an operating margin of 55.1% for full-year 2013.

Total other expense was $3 million for full-year 2013 versus $4 million in 2012.

MasterCard’s effective tax rate was 30.9% for full-year 2013, versus a rate of 29.9% for full-year 2012, excluding special items. The increase was primarily due to higher discrete benefits in 2012, partially offset by a more favorable geographic mix of earnings in 2013. Including special items, the effective tax rate was 30.8% for full-year 2013, versus a rate of 29.9% for full-year 2012.

For full-year 2013, MasterCard repurchased 41 million shares at a cost of approximately $2.4 billion.

Fourth-Quarter and Full-Year Financial Results Conference Call Details

At 9:00 a.m. ET today, the company will host a conference call to discuss its fourth-quarter and full-year financial results.

The dial-in information for this call is 800-708-4540 (within the U.S.) and 847-619-6397 (outside the U.S.), and the passcode is 36351326. A replay of the call will be available for one week and can be accessed by dialing 888-843-7419 (within the U.S.) and 630-652-3042 (outside the U.S.), and using passcode 36351326.

This call can also be accessed through the Investor Relations section of the company’s website at www.mastercard.com.

Non-GAAP Financial Information

The company’s total operating expenses, operating income, effective tax rate, net income and earnings per diluted share, excluding special items, are non-GAAP financial measures that are reconciled to their most directly comparable GAAP measures in the accompanying tables.

The presentation of growth rates adjusted for currency also represent a non-GAAP measure and are calculated by remeasuring the prior period’s results using the current period’s exchange rates.

About MasterCard Incorporated

MasterCard (NYSE:MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardNews, join the discussion on the Cashless Pioneers Blog and subscribe for the latest news on the Engagement Bureau.

Forward-Looking Statements

Statements in this press release which are not historical facts, including statements about MasterCard’s plans, strategies, beliefs and expectations, are forward-looking and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made. Accordingly, except for the company’s ongoing obligations under the U.S. federal securities laws, the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. Such forward-looking statements include, without limitation, statements related to the company’s continued ability to invest in processing and person-to-person payments, as well as expand its MasterPass digital platform.

Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the company’s filings with the Securities and Exchange Commission (SEC), including the company’s Annual Report on Form 10-K for the year ended December 31, 2012, the company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that were filed with the SEC during 2013, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives set forth above. Factors other than those listed above could also cause the company’s results to differ materially from expected results.

 

MASTERCARD INCORPORATED

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

               

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2013       2012 2013       2012
(in millions, except per share data)
 
Net Revenue $ 2,126 $ 1,895 $ 8,346 $ 7,391
Operating Expenses
General and administrative 719 639 2,649 2,429
Advertising and marketing 321 295 841 775
Depreciation and amortization 71 62 258 230
Provision for litigation settlement   95     -     95     20  
Total operating expenses   1,206           996     3,843           3,454  
Operating income 920 899 4,503 3,937
Other Income (Expense)
Investment income 8 10 38 37
Interest expense (7 ) (7 ) (14 ) (20 )
Other income (expense), net   (10 )   (8 )   (27 )   (21 )
Total other income (expense)   (9 )   (5 )   (3 )   (4 )
Income before income taxes 911 894 4,500 3,933
Income tax expense   288     289     1,384     1,174  
Net Income $ 623   $ 605   $ 3,116   $ 2,759  
 
Basic Earnings per Share $ 0.52   $ 0.49   $ 2.57   $ 2.20  
Basic Weighted-Average Shares Outstanding   1,201     1,240     1,211     1,253  
Diluted Earnings per Share $ 0.52   $ 0.49   $ 2.56   $ 2.19  
Diluted Weighted-Average Shares Outstanding   1,205     1,246     1,215     1,258  
 
 

MASTERCARD INCORPORATED

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

     
December 31,
2013     2012
(in millions, except share data)
ASSETS
Cash and cash equivalents $ 3,599 $ 2,052
Restricted cash for litigation settlement 723 726
Investment securities available-for-sale, at fair value 2,696 2,951
Accounts receivable 966 925
Settlement due from customers 1,351 1,117
Restricted security deposits held for customers 911 777
Prepaid expenses and other current assets 471 681
Deferred income taxes 233   128  
Total Current Assets 10,950 9,357
Property, plant and equipment, net 526 472
Deferred income taxes 70 60
Goodwill 1,122 1,092
Other intangible assets, net 672 672
Other assets 902   809  
Total Assets $ 14,242   $ 12,462  
LIABILITIES AND EQUITY
Accounts payable $ 338 $ 357
Settlement due to customers 1,433 1,064
Restricted security deposits held for customers 911 777
Accrued litigation 886 726
Accrued expenses 2,101 1,748
Other current liabilities 363   234  
Total Current Liabilities 6,032 4,906
Deferred income taxes 117 104
Other liabilities 598   523  
Total Liabilities 6,747 5,533
Commitments and Contingencies
Stockholders’ Equity

Class A common stock, $0.0001 par value; authorized 3,000,000,000 shares,

1,341,541,110 and 1,336,049,030 shares issued and 1,148,838,370 and

1,184,050,750 outstanding, respectively

Class B common stock, $0.0001 par value; authorized 1,200,000,000 shares,

45,350,070 and 48,388,400 issued and outstanding, respectively
Additional paid-in-capital 3,762 3,641
Class A treasury stock, at cost, 192,702,740 and 151,998,280 shares, respectively (6,577 ) (4,139 )
Retained earnings 10,121 7,354
Accumulated other comprehensive income 178   61  
Total Stockholders’ Equity 7,484 6,917
Non-controlling interests 11   12  
Total Equity 7,495   6,929  
Total Liabilities and Equity $ 14,242   $ 12,462  
 
 

MASTERCARD INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

     
For the Years Ended December 31,
2013     2012     2011
(in millions)
Operating Activities
Net income $ 3,116 $ 2,759 $ 1,906
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 258 230 194
Share-based payments 63 35
Deferred income taxes (119 ) 241 (175 )
Other 67 52 17
Changes in operating assets and liabilities:
Accounts receivable (42 ) (121 ) (162 )
Income taxes receivable 153 (185 )
Settlement due from customers (194 ) (500 ) (114 )
Prepaid expenses (70 ) (81 ) 27
Accrued litigation and legal settlements 160 (44 ) 467
Accounts payable (20 ) (2 ) 67
Settlement due to customers 322 348 74
Accrued expenses 315 221 296
Net change in other assets and liabilities 126   30   52  
Net cash provided by operating activities 4,135   2,948   2,684  
Investing Activities
Purchases of investment securities available-for-sale (2,526 ) (2,981 ) (899 )
Proceeds from sales of investment securities available-for-sale 1,488 390 485
Proceeds from maturities of investment securities available-for-sale 1,321 891 63
Purchases of property, plant and equipment (155 ) (96 ) (77 )
Capitalized software (144 ) (122 ) (100 )
Proceeds from maturities of investment securities held-to-maturity 36 300
Investment in nonmarketable equity investments (20 ) (118 ) (74 )
Decrease (increase) in restricted cash for litigation settlement 3 (726 )
Acquisition of businesses, net of cash acquired (70 ) (460 )
Other investing activities (7 ) (7 ) 14  
Net cash used in investing activities (4 ) (2,839 ) (748 )
Financing Activities
Purchases of treasury stock (2,443 ) (1,748 ) (1,148 )
Dividends paid (255 ) (132 ) (77 )
Proceeds from debt 35
Cash proceeds from exercise of stock options 26 31 19
Tax benefit for share-based compensation 19 47 12
Other financing activities (11 ) 4   (21 )
Net cash used in financing activities (2,629 ) (1,798 ) (1,215 )
Effect of exchange rate changes on cash and cash equivalents 45   7   (54 )
Net increase (decrease) in cash and cash equivalents 1,547 (1,682 ) 667
Cash and cash equivalents - beginning of period 2,052   3,734   3,067  
Cash and cash equivalents - end of period $ 3,599   $ 2,052   $ 3,734  
 
 

MASTERCARD INCORPORATED OPERATING PERFORMANCE

               
For the 3 Months ended December 31, 2013

All MasterCard Credit,

GDV   Growth   Growth   Purchase

Volume

  Growth   Purchase

Trans.

  Cash

Volume

  Growth Cash

Trans.

Accounts Cards
Charge and Debit Programs (Bil.)   (USD)   (Local)   (Bil.)   (Local)   (Mil.)   (Bil.)   (Local)   (Mil.)   (Mil.)   (Mil.)
APMEA $312 14.5% 20.4% $211 20.0% 2,235 $101 21.3% 858 393 422
Canada 35 0.6% 6.6% 32 7.1% 376 3 -0.3% 6 45 55
Europe 341 15.5% 14.3% 230 10.1% 3,379 111 24.0% 619 306 323
Latin America

93

10.2% 17.0%

56

23.4%

1,214

37

8.4%

203

125

145

Worldwide less United States 781 13.7% 16.6% 530 15.0% 7,204 251 20.1% 1,686 869 944
United States

324

7.4% 7.4%

275

7.6%

4,938

48

6.4%

311

300

337

Worldwide 1,104 11.8% 13.8% 805 12.4% 12,142 299 17.7% 1,997 1,168 1,281
 
MasterCard Credit and Charge Programs
Worldwide less United States 466 10.6% 13.8% 413 14.5% 4,839 53 9.2% 213 497 563
United States

155

5.7% 5.7%

148

5.7%

1,681

7

4.6%

7

146

178

Worldwide 621 9.4% 11.7% 561 12.0% 6,520 60 8.6% 220 643 741
 
MasterCard Debit Programs
Worldwide less United States 314 18.5% 21.0% 117 17.1% 2,365 198 23.4% 1,473 372 382
United States

169

9.1% 9.1%

127

9.8%

3,257

41

6.7%

304

154

158

Worldwide 483 15.1% 16.5% 244 13.2% 5,622 239 20.2% 1,777 525 540
 
 
For the 12 Months ended December 31, 2013
All MasterCard Credit, GDV Growth Growth Purchase

Volume

Growth Purchase

Trans.

Cash

Volume

Growth Cash

Trans.

Accounts Cards
Charge and Debit Programs (Bil.)   (USD)   (Local)   (Bil.)   (Local)   (Mil.)   (Bil.)   (Local)   (Mil.)   (Mil.)   (Mil.)
APMEA $1,150 17.1% 21.3% $770 19.8% 8,179 $380 24.4% 3,101 393 422
Canada 131 3.4% 6.7% 121 7.2% 1,403 11 1.0% 24 45 55
Europe 1,239 15.6% 14.5% 846 11.4% 12,394 393 21.9% 2,272 306 323
Latin America

340

12.2% 16.4%

204

21.3%

4,466

136

9.7%

768

125

145

Worldwide less United States 2,860 15.2% 17.0% 1,940 15.3% 26,442 920 20.7% 6,165 869 944
United States

1,243

6.6% 6.6%

1,051

7.0%

18,861

192

4.3%

1,250

300

337

Worldwide 4,103 12.4% 13.6% 2,991 12.2% 45,304 1,112 17.5% 7,416 1,168 1,281
 
MasterCard Credit and Charge Programs
Worldwide less United States 1,724 11.5% 13.9% 1,521 14.3% 18,016 203 10.8% 827 497 563
United States

587

4.4% 4.4%

560

4.9%

6,357

27

-5.0%

26

146

178

Worldwide 2,311 9.6% 11.3% 2,081 11.6% 24,372 230 8.7% 853 643 741
 
MasterCard Debit Programs
Worldwide less United States 1,136 21.2% 22.0% 419 19.0% 8,427 716 23.8% 5,339 372 382
United States

656

8.6% 8.6%

491

9.5%

12,505

165

6.0%

1,224

154

158

Worldwide 1,792 16.3% 16.7% 910 13.7% 20,932 882 20.0% 6,563 525 540
 
 
For the 3 Months ended December 31, 2012
All MasterCard Credit, GDV Growth Growth Purchase

Volume

Growth Purchase

Trans.

Cash

Volume

Growth Cash

Trans.

Accounts Cards
Charge and Debit Programs (Bil.)   (USD)   (Local)   (Bil.)   (Local)   (Mil.)   (Bil.)   (Local)   (Mil.)   (Mil.)   (Mil.)
APMEA $272 23.6% 23.1% $183 19.8% 1,882 $89 30.5% 676 339 367
Canada 34 11.2% 7.6% 32 7.8% 347 3 4.5% 6 40 48
Europe 295 14.9% 16.4% 206 13.2% 2,881 89 24.5% 514 257 273
Latin America

85

14.3% 16.8%

50

20.2%

1,062

34

12.3%

192

112

131

Worldwide less United States 687 17.9% 18.5% 471 16.0% 6,172 216 24.4% 1,388 748 820
United States

301

6.8% 6.8%

256

7.2%

4,569

45

4.8%

297

274

311

Worldwide 988 14.3% 14.7% 727 12.7% 10,741 261 20.5% 1,685 1,021 1,131
 
MasterCard Credit and Charge Programs
Worldwide less United States 421 14.6% 15.0% 372 15.1% 4,315 50 14.2% 199 470 534
United States

147

2.5% 2.5%

140

4.1%

1,632

7

-21.9%

7

141

175

Worldwide 568 11.2% 11.5% 512 11.9% 5,946 56 8.1% 205 611 709
 
MasterCard Debit Programs
Worldwide less United States 265 23.6% 24.6% 99 19.5% 1,858 166 27.9% 1,189 277 286
United States

155

11.3% 11.3%

116

11.2%

2,937

39

11.7%

291

133

136

Worldwide 420 18.8% 19.3% 215 14.9% 4,795 205 24.5% 1,479 410 422
 
 
For the 12 Months ended December 31, 2012
All MasterCard Credit, GDV Growth Growth Purchase

Volume

Growth Purchase

Trans.

Cash

Volume

Growth Cash

Trans.

Accounts Cards
Charge and Debit Programs (Bil.)   (USD)   (Local)   (Bil.)   (Local)   (Mil.)   (Bil.)   (Local)   (Mil.)   (Mil.)   (Mil.)
APMEA $981 21.6% 22.9% $662 21.1% 6,862 $319 26.8% 2,396 339 367
Canada 127 6.7% 7.7% 116 8.5% 1,288 11 -0.3% 23 40 48
Europe 1,072 9.3% 16.5% 752 12.6% 10,503 320 26.5% 1,903 257 273
Latin America

303

9.8% 19.1%

181

23.2%

3,883

121

13.5%

723

112

131

Worldwide less United States 2,483 13.8% 18.7% 1,711 16.5% 22,535 772 23.9% 5,046 748 820
United States

1,166

9.1% 9.1%

982

9.0%

17,542

184

9.7%

1,208

274

311

Worldwide 3,650 12.2% 15.5% 2,693 13.7% 40,077 956 20.9% 6,254 1,021 1,131
 
MasterCard Credit and Charge Programs
Worldwide less United States 1,546 11.5% 15.4% 1,361 15.9% 15,992 185 11.5% 748 470 534
United States

562

3.5% 3.5%

534

5.1%

6,236

28

-19.1%

27

141

175

Worldwide 2,109 9.2% 12.0% 1,895 12.7% 22,228 213 6.2% 775 611 709
 
MasterCard Debit Programs
Worldwide less United States 937 17.8% 24.7% 350 18.9% 6,543 587 28.4% 4,298 277 286
United States

604

14.9% 14.9%

448

14.1%

11,306

156

17.2%

1,181

133

136

Worldwide 1,541 16.6% 20.7% 798 16.2% 17,849 743 25.9% 5,479 410 422
APMEA = Asia Pacific / Middle East / Africa
Note that the figures in the preceding tables may not sum due to rounding; growth represents change from the comparable year-ago period
 

Footnote

The tables set forth the gross dollar volume (“GDV”), purchase volume, cash volume and the number of purchase transactions, cash transactions, accounts, cards on a regional and global basis for MasterCard®-branded and MasterCard Electronic™-branded cards. Growth rates over prior periods are provided for volume-based data.

Debit transactions on Maestro® and Cirrus®-branded cards, Mondex® transactions and transactions involving brands other than MasterCard are not included in the preceding tables.

For purposes of the table: GDV represents purchase volume plus cash volume and includes the impact of balance transfers and convenience checks; “purchase volume” means the aggregate dollar amount of purchases made with MasterCard-branded cards for the relevant period; and “cash volume” means the aggregate dollar amount of cash disbursements obtained with MasterCard-branded cards for the relevant period. The number of cards includes virtual cards, which are MasterCard-branded payment accounts that do not generally have physical cards associated with them.

The MasterCard payment product is comprised of credit, charge and debit programs, and data relating to each type of program is included in the tables. Debit programs include MasterCard-branded debit programs where the primary means of cardholder validation at the point of sale is for cardholders either to sign a sales receipt or enter a PIN. The tables include information with respect to transactions involving MasterCard-branded cards that are not processed by MasterCard and transactions for which MasterCard does not earn significant revenues.

Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which MasterCard volumes are reported. These exchange rates are calculated on a quarterly basis using the average exchange rate for each quarter. MasterCard reports period-over-period rates of change in purchase volume and cash volume on the basis of local currency information, in order to eliminate the impact of changes in the value of foreign currencies against the U.S. dollar in calculating such rates of change.

The data set forth in the GDV, purchase volume, purchase transactions, cash volume and cash transactions columns is provided by MasterCard customers and is subject to verification by MasterCard and partial cross-checking against information provided by MasterCard’s transaction processing systems. The data set forth in the accounts and cards columns is provided by MasterCard customers and is subject to certain limited verification by MasterCard. A portion of the data set forth in the accounts and cards columns reflects the impact of routine portfolio changes among customers and other practices that may lead to over counting of the underlying data in certain circumstances. All data is subject to revision and amendment by MasterCard’s customers subsequent to the date of its release.

In 2012, certain MasterCard Debit and Credit Programs in the Europe region have changed due to a reclassification of programs. There is no impact at the All MasterCard Programs level. In addition, Purchase Transactions for certain Credit Programs in the Latin America region have been restated due to revisions from several customers. MasterCard revenue is not impacted from these changes. Data for the comparable periods in 2012, 2011 and 2010 have been restated to be consistent with these approaches.

In 2013Q4, a large Maestro customer revised their number of Maestro cards to exclude inactive cards. Data for the comparable periods in 2013, 2012, and 2011 have been revised to be consistent with this approach. MasterCard revenue is not impacted from these historical changes.

Performance information for prior periods can be found in the "Investor Relations" section of MasterCard's website at www.mastercard.com.

 

GAAP Reconciliations

($ in millions, except per share data)

                   

Three Months Ended

December 31, 2013

Three Months Ended

December 31, 2012

Actual

Special

Item (a)

Non-GAAP Actual
 
Provision for litigation settlement $ 95 $ (95) $ - $ -
 
Total operating expenses 1,206 (95) 1,111 996
 
Operating income 920 95 1,015 899
 
Operating Margin 43.3% 47.7% 47.4%
 
Income before income taxes 911 95 1,006 894
 
Income tax expense 288 34 322 289
 
Effective Tax Rate 31.6% 0.4% 32.0% 32.4%
 
Net Income 623 61 684 605
 
 
Basic Earnings per Share $ 0.52 $ 0.05 $ 0.57 $ 0.49
 
Diluted Earnings per Share $ 0.52 $ 0.05 $ 0.57 $ 0.49
 
(a) Represents effect of net incremental accrual for U.S. merchant litigations
                         

Twelve Months Ended

December 31, 2013

Twelve Months Ended

December 31, 2012

Actual

Special

Item (a)

Non-GAAP Actual

Special

Item (a)

Non-GAAP
 
Provision for litigation settlement $ 95 $ (95 ) $ - $ 20 $ (20 ) $ -
 
Total operating expenses 3,843 (95 ) 3,748 3,454 (20 ) 3,434
 
Operating income 4,503 95 4,598 3,937 20 3,957
 
Operating Margin 54.0 % 55.1 % 53.3 % 53.5 %
 
Income before income taxes 4,500 95 4,595 3,933 20 3,953
 
Income tax expense 1,384 34 1,418 1,174 7 1,181
 
Effective Tax Rate 30.8 % 0.1 % 30.9 % 29.9 % - 29.9 %
 
Net Income 3,116 61 3,177 2,759 13 2,772
 
 
Basic Earnings per Share $ 2.57 $ 0.05 $ 2.62 $ 2.20 $ 0.01 $ 2.21
 
Diluted Earnings per Share $ 2.56 $ 0.05 $ 2.61 $ 2.19 $ 0.01 $ 2.20
 
(a) Represents effect of net incremental accrual for U.S. merchant litigations

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Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business in 2016. However, IoT is far more complex than most firms expected. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, a renowned visionary and thought leader, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology and business models to adopt and leverage IoT. He will drill down to the components in this fra...
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
From wearable activity trackers to fantasy e-sports, data and technology are transforming the way athletes train for the game and fans engage with their teams. In his session at @ThingsExpo, will present key data findings from leading sports organizations San Francisco 49ers, Orlando Magic NBA team. By utilizing data analytics these sports orgs have recognized new revenue streams, doubled its fan base and streamlined costs at its stadiums. John Paul is the CEO and Founder of VenueNext. Prior ...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
WebRTC adoption has generated a wave of creative uses of communications and collaboration through websites, sales apps, customer care and business applications. As WebRTC has become more mainstream it has evolved to use cases beyond the original peer-to-peer case, which has led to a repeating requirement for interoperability with existing infrastructures. In his session at @ThingsExpo, Graham Holt, Executive Vice President of Daitan Group, will cover implementation examples that have enabled ea...
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often ...
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, will compare the Jevons Paradox to modern-day enterprise IT, e...
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...