Welcome!

.NET Authors: Lori MacVittie, Yeshim Deniz, Ivan Antsipau, Liz McMillan, Michael Bushong

News Feed Item

FMC Technologies Reports Fourth Quarter 2012 Diluted Earnings per Share of $0.50

- Record full year Subsea Technologies orders of $4.6 billion

HOUSTON, Feb. 12, 2013 /PRNewswire/ -- FMC Technologies, Inc. (NYSE: FTI) today reported fourth quarter 2012 revenue of $1.8 billion, up 23 percent from the prior-year quarter.  Diluted earnings per share were $0.50 compared to $0.41 in the prior-year quarter. This included a charge related to the 2012 Multi Phase Meters earn-out adjustment of $17.5 million or $0.07 per share.

Total inbound orders were $1.9 billion and included $1.4 billion in Subsea Technologies' orders. Backlog for the Company was $5.4 billion, including Subsea Technologies' backlog of $4.6 billion.

Full Year 2012 Results

Total Company revenue for 2012 was $6.2 billion, and operating profit was $784.7 million.  The full year 2012 diluted earnings per share were $1.78.

"We are pleased to report record full year subsea revenue and operating profit," said John Gremp, Chairman and CEO of FMC Technologies. "For 2013, we expect to see continued revenue and earnings growth within Subsea Technologies."

"Surface Technologies international surface wellhead business delivered its strongest quarter. We expect this solid performance in the international market to continue into 2013, while the timing of the recovery in the North American market remains uncertain."

Review of Operations – Fourth Quarter 2012

Subsea Technologies

Subsea Technologies' fourth quarter revenue was $1.2 billion, up 28 percent from the prior-year quarter.  

Subsea Technologies' operating profit more than doubled from the prior-year quarter to $151.2 million due to volume growth and improved performance.

Subsea Technologies' inbound orders in the fourth quarter were $1.4 billion and backlog was $4.6 billion.

Surface Technologies

Surface Technologies' fourth quarter revenue was $443.7 million, up 19 percent from the prior-year quarter driven by higher volume in surface wellhead and the inclusion of revenue from our Pure Energy Services Ltd. acquisition completed in October 2012. 

Surface Technologies' operating profit decreased 15 percent from the prior-year quarter to $64.6 million in the fourth quarter as the result of reduced fluid control and surface wellhead activity in North America.

Surface Technologies' inbound orders for the fourth quarter were $388.8 million and backlog was $500.8 million.

Energy Infrastructure

Energy Infrastructure's fourth quarter revenue was $166.6 million, up 10 percent from the prior-year quarter.

Energy Infrastructure's operating profit increased 13 percent from the prior-year quarter to $22.8 million in the fourth quarter driven by improved project performance.

Energy Infrastructure's inbound orders for the fourth quarter were $148.6 million and backlog was $298.0 million.

Corporate Items

Corporate expense in the fourth quarter was $11.4 million, an increase of $0.3 million from the prior-year quarter. Other revenue and other expense, net, was $40.0 million, an increase of $24.9 million from the prior-year quarter. This was largely due to an increase of $17.2 million from the prior-year quarter related to the charge associated with the earn-out for the acquisition of Multi Phase Meters and a charge associated with the change to the Norway pension of $8.6 million.

The Company ended the quarter with net debt of $1.3 billion. Net interest expense was $10.7 million in the quarter.

The Company repurchased approximately 927,000 shares of common stock in the quarter, at an average cost of $42.21 per share.

Depreciation and amortization for the fourth quarter was $46.9 million, up $13.1 million from the sequential quarter. Capital expenditures for the fourth quarter were $122.9 million.

The Company recorded an effective tax rate of 31.8 percent for the fourth quarter.

Summary and Outlook

FMC Technologies reported fourth quarter diluted earnings per share of $0.50.

Total inbound orders of $1.9 billion in the fourth quarter included $1.4 billion in Subsea Technologies' orders. The Company's backlog stands at $5.4 billion, including Subsea Technologies' backlog of $4.6 billion.

For 2013, we expect increasing Subsea Technologies revenue and margins and continued solid performance in international surface wellhead, offset by a challenging North American land market.

The Company's guidance for 2013 diluted earnings per share is a range of $2.05 to $2.25.

FMC Technologies, Inc. (NYSE:FTI) is a leading global provider of technology solutions for the energy industry. Named by FORTUNE® Magazine as the World's Most Admired Oil and Gas Equipment, Service Company in 2012, the Company has approximately 18,400 employees and operates 30 production facilities in 16 countries. FMC Technologies designs, manufactures and services technologically sophisticated systems and products such as subsea production and processing systems, surface wellhead systems, high pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry. For more information, visit www.fmctechnologies.com.

This release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words "expected," "continue," "outlook," and similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. Such forward-looking statements involve significant risks, uncertainties and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. FMC Technologies cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Known material factors that could cause actual results to differ materially from those contemplated in the forward-looking statements include those set forth in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as the following: demand for our systems and services, which is affected by changes in the price of, and demand for, crude oil and natural gas in domestic and international markets; potential liabilities arising out of the installation or use of our systems; continuing consolidation within our customers' industries; U.S. and international laws and regulations that may increase our costs, limit the demand for our products and services or restrict our operations; disruptions in the political, regulatory, economic and social conditions of the foreign countries in which we conduct business; fluctuations in currency markets worldwide; cost overruns that may affect profit realized on our fixed price contracts; the cumulative loss of major contracts or alliances; our dependence on the continuing services of key managers and employees and our ability to attract, retain and motivate additional highly-skilled employees for the operation and expansion of our business; rising costs and availability of raw materials; a failure of our information technology infrastructure or any significant breach of security; our ability to develop and implement new technologies and services, as well as our ability to protect and maintain critical intellectual property assets; the outcome of uninsured claims and litigation against us; disruptions in the timely delivery of our backlog and its effect on our future sales, profitability, and our relationships with our customers; and disruptions in the financial and credit markets and its impact on our customers' activity levels, spending for our products and services and ability to pay amounts owed us. FMC Technologies undertakes no obligation to publicly update or revise any of its forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. 

FMC Technologies, Inc. will conduct its fourth quarter 2012 conference call at 9:00 a.m. ET on Wednesday, February 13, 2013. The event will be available at www.fmctechnologies.com. An archived audio replay will be available after the event at the same website address. In the event of a disruption of service or technical difficulty during the call, information will be posted at www.fmctechnologies.com/earnings.

 

FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions except per share amounts, unaudited)





















Three Months Ended


Twelve Months Ended



December 31


December 31



2012


2011


2012


2011










Revenue

$

1,840.9

$

1,500.5

$

6,151.4

$

5,099.0

Costs and expenses


1,651.3


1,356.1


5,546.6


4,536.6



189.6


144.4


604.8


562.4










Other income (expense), net


(1.4)


(2.9)


23.0


(1.4)










Income before net interest expense and income taxes


188.2


141.5


627.8


561.0

Net interest expense


(10.7)


(2.2)


(26.6)


(8.2)










Income before income taxes


177.5


139.3


601.2


552.8

Provision for income taxes


56.1


38.8


166.4


149.3










Net income


121.4


100.5


434.8


403.5

Net income attributable to noncontrolling interests


(1.0)


(1.3)


(4.8)


(3.7)










Net income attributable to FMC Technologies, Inc.

$

120.4

$

99.2

$

430.0

$

399.8










Earnings per share attributable to FMC Technologies, Inc.:









  Basic

$

0.50

$

0.41

$

1.79

$

1.66

  Diluted

$

0.50

$

0.41

$

1.78

$

1.64










Weighted average shares outstanding:









  Basic


238.8


239.8


239.7


241.2

  Diluted


240.1


241.9


240.9


243.2










 

 

 


FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES

BUSINESS SEGMENT DATA

(Unaudited and in millions)













Three Months Ended



Twelve Months Ended



December 31



December 31



2012


2011



2012


2011

Revenue




















Subsea Technologies

$

1,235.5

$

963.9


$

4,005.5

$

3,288.1

Surface Technologies


443.7


373.7



1,598.1


1,310.8

Energy Infrastructure


166.6


151.1



576.2


503.4

Other revenue (1) and intercompany eliminations


(4.9)


11.8



(28.4)


(3.3)


$

1,840.9

$

1,500.5


$

6,151.4

$

5,099.0











Income before income taxes




















Segment operating profit










Subsea Technologies

$

151.2

$

69.8


$

451.5

$

319.9

Surface Technologies


64.6


76.4



284.3


250.1

Energy Infrastructure


22.8


20.2



48.9


49.3

Total segment operating profit


238.6


166.4



784.7


619.3











Corporate items










Corporate expense


(11.4)


(11.1)



(41.8)


(39.4)

Other revenue and other expense, net (1)


(40.0)


(15.1)



(119.9)


(22.6)

Net interest expense


(10.7)


(2.2)



(26.6)


(8.2)

Total corporate items


(62.1)


(28.4)



(188.3)


(70.2)











Income from continuing operations before income taxes attributable to FMC Technologies, Inc.

$

176.5

$

138.0


$

596.4

$

549.1


























(1) Other revenue comprises certain unrealized gains and losses on derivative instruments related to unexecuted sales contracts.  Other expense, net, generally includes stock-based compensation, other employee benefits, LIFO adjustments, certain foreign exchange gains and losses, and the impact of unusual or strategic transactions not representative of segment operations.











 

 

FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES

BUSINESS SEGMENT DATA

(Unaudited and in millions)












Three Months Ended


Twelve Months Ended



December 31


December 31



2012


2011


2012


2011

Inbound Orders


















Subsea Technologies

$

1,378.9

$

1,295.6

$

4,571.4

$

3,933.3

Surface Technologies


388.8


403.6


1,519.5


1,488.2

Energy Infrastructure


148.6


126.0


644.7


555.5

Intercompany eliminations and other


(6.6)


(2.3)


(13.7)


(16.3)

Total inbound orders

$

1,909.7

$

1,822.9

$

6,721.9

$

5,960.7






























December 31







2012


2011





Order Backlog


















Subsea Technologies

$

4,580.1

$

4,090.0





Surface Technologies


500.8


577.7





Energy Infrastructure


298.0


226.9





Intercompany eliminations


(1.1)


(18.2)





Total order backlog

$

5,377.8

$

4,876.4























 

 

 

FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)













December 31,


December 31,



2012


2011



(Unaudited)








Cash and cash equivalents

$

342.1

$

344.0

Trade receivables, net


1,765.5


1,341.6

Inventories, net


965.1


712.2

Other current assets


415.6


390.1

     Total current assets


3,488.3


2,787.9






Property, plant and equipment, net


1,243.5


767.9

Goodwill


597.7


265.8

Intangible assets, net


347.4


128.0

Investments


37.4


161.4

Other assets


188.6


160.0

Total assets

$

5,902.9

$

4,271.0






Short-term debt and current portion of long-term debt

$

60.4

$

587.6

Accounts payable, trade


664.2


546.8

Advance payments and progress billings


501.6


450.2

Other current liabilities


744.2


648.3

     Total current liabilities


1,970.4


2,232.9






Long-term debt, less current portion


1,580.4


36.0

Other liabilities


498.9


564.4

FMC Technologies, Inc. stockholders' equity


1,836.9


1,424.6

Noncontrolling interest


16.3


13.1

Total liabilities and equity

$

5,902.9

$

4,271.0











 

 

 

FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in millions)








Twelve Months Ended



December 31



2012


2011

Cash provided (required) by operating activities:





Net income

$

434.8

$

403.5

     Depreciation and amortization


146.2


107.8

     Trade accounts receivable, net


(337.3)


(286.7)

     Inventories, net


(206.6)


(162.6)

     Accounts payable, trade


83.0


214.7

     Advance payments and progress billings


25.9


(95.9)

     Other


(7.6)


(16.0)

Net cash provided by operating activities


138.4


164.8






Cash provided (required) by investing activities:





     Capital expenditures


(405.6)


(274.0)

     Acquisitions, net of cash acquired


(615.5)


-

     Other investing


1.2


0.3

Net cash required by investing activities


(1,019.9)


(273.7)






Cash provided (required) by financing activities:





     Net increase in debt


983.2


264.0

     Issuance of capital stock


0.7


1.3

     Purchase of stock held in treasury


(91.1)


(114.0)

     Other financing


(11.4)


(10.3)

Net cash provided by financing activities


881.4


141.0






Effect of changes in foreign exchange rates on cash and cash equivalents


(1.8)


(3.6)






Increase (decrease) in cash and cash equivalents


(1.9)


28.5






Cash and cash equivalents, beginning of period


344.0


315.5






Cash and cash equivalents, end of period

$

342.1

$

344.0











(Logo: http://photos.prnewswire.com/prnh/20081222/LAM028LOGO)

SOURCE FMC Technologies, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce the value of the network in helping organizations to maximize their company’s cloud experience.
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have spoken with, or attended presentations from, utilities in the United States, South America, Asia and Europe. This session will provide a look at the CREPE drivers for SmartGrids and the solution spaces used by SmartGrids today and planned for the near future. All organizations can learn from SmartGrid’s use of Predictive Maintenance, Demand Prediction, Cloud, Big Data and Customer-facing Dashboards...
All major researchers estimate there will be tens of billions devices – computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be!
Noted IoT expert and researcher Joseph di Paolantonio (pictured below) has joined the @ThingsExpo faculty. Joseph, who describes himself as an “Independent Thinker” from DataArchon, will speak on the topic of “Smart Grids & Managing Big Utilities.” Over his career, Joseph di Paolantonio has worked in the energy, renewables, aerospace, telecommunications, and information technology industries. His expertise is in data analysis, system engineering, Bayesian statistics, data warehouses, business intelligence, data mining, predictive methods, and very large databases (VLDB). Prior to DataArchon, he served as a VP and Principal Analyst with Constellation Group. He is a member of the Boulder (Colo.) Brain Trust, an organization with a mission “to benefit the Business Intelligence and data management industry by providing pro bono exchange of information between vendors and independent analysts on new trends and technologies and to provide vendors with constructive feedback on their of...
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation and integration; and visibility through intelligent business operations and big data.
There will be 50 billion Internet connected devices by 2020. Today, every manufacturer has a propriety protocol and an app. How do we securely integrate these "things" into our lives and businesses in a way that we can easily control and manage? Even better, how do we integrate these "things" so that they control and manage each other so our lives become more convenient or our businesses become more profitable and/or safe? We have heard that the best interface is no interface. In his session at Internet of @ThingsExpo, Chris Matthieu, Co-Founder & CTO at Octoblu, Inc., will discuss how these devices generate enough data to learn our behaviors and simplify/improve our lives. What if we could connect everything to everything? I'm not only talking about connecting things to things but also systems, cloud services, and people. Add in a little machine learning and artificial intelligence and now we have something interesting...
Last week, while in San Francisco, I used the Uber app and service four times. All four experiences were great, although one of the drivers stopped for 30 seconds and then left as I was walking up to the car. He must have realized I was a blogger. None the less, the next car was just a minute away and I suffered no pain. In this article, my colleague, Ved Sen, Global Head, Advisory Services Social, Mobile and Sensors at Cognizant shares his experiences and insights.
We are reaching the end of the beginning with WebRTC and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) irreversibly encoded. In his session at Internet of @ThingsExpo, Peter Dunkley, Technical Director at Acision, will look at how this identity problem can be solved and discuss ways to use existing web identities for real-time communication.
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT. Attendees will learn real-world benefits of WebRTC and explore future possibilities, as WebRTC and IoT intersect to improve customer service.
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at Internet of @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, will share some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder of TeleStax, an Open Source Cloud Communications company that helps the shift from legacy IN/SS7 telco networks to IP-based cloud comms. An early investor in multiple start-ups, he still finds time to code for his companies and contribute to open source projects.
The Internet of Things (IoT) promises to create new business models as significant as those that were inspired by the Internet and the smartphone 20 and 10 years ago. What business, social and practical implications will this phenomenon bring? That's the subject of "Monetizing the Internet of Things: Perspectives from the Front Lines," an e-book released today and available free of charge from Aria Systems, the leading innovator in recurring revenue management.
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges.
There’s Big Data, then there’s really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at 6th Big Data Expo®, Hannah Smalltree, Director at Treasure Data, to discuss how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other machines.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at Internet of @ThingsExpo, Erik Lagerway, Co-founder of Hookflash, will walk through the shifting landscape of traditional telephone and voice services to the modern P2P RTC era of OTT cloud assisted services.
While great strides have been made relative to the video aspects of remote collaboration, audio technology has basically stagnated. Typically all audio is mixed to a single monaural stream and emanates from a single point, such as a speakerphone or a speaker associated with a video monitor. This leads to confusion and lack of understanding among participants especially regarding who is actually speaking. Spatial teleconferencing introduces the concept of acoustic spatial separation between conference participants in three dimensional space. This has been shown to significantly improve comprehension and conference efficiency.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, will discuss single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example to explain some of these concepts including when to use different storage models.
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual Controller™ Technology (SVCT) to eliminate the I/O blender effect and accelerate applications Gridstore delivers vmOptimized™ Storage that self-optimizes to each application or VM across both virtual and physical environments. Leveraging a grid architecture, Gridstore delivers the first end-to-end storage QoS to ensure the most important App or VM performance is never compromised. The storage grid, that uses Gridstore’s performance optimized nodes or capacity optimized nodes, starts with as few a...
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. These technological reforms have not only changed computers and smartphones, but are also changing the data processing model for all information devices. In particular, in the area known as M2M (Machine-To-Machine), there are great expectations that information with a new type of value can be produced using a variety of devices and sensors saving/sharing data via the network and through large-scale cloud-type data processing. This consortium believes that attaching a huge number of devic...
Innodisk is a service-driven provider of industrial embedded flash and DRAM storage products and technologies, with a focus on the enterprise, industrial, aerospace, and defense industries. Innodisk is dedicated to serving their customers and business partners. Quality is vitally important when it comes to industrial embedded flash and DRAM storage products. That’s why Innodisk manufactures all of their products in their own purpose-built memory production facility. In fact, they designed and built their production center to maximize manufacturing efficiency and guarantee the highest quality of our products.
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. Over the summer Gartner released its much anticipated annual Hype Cycle report and the big news is that Internet of Things has now replaced Big Data as the most hyped technology. Indeed, we're hearing more and more about this fascinating new technological paradigm. Every other IT news item seems to be about IoT and its implications on the future of digital business.