Good day, ladies and gentlemen. Welcome to the FleetCor Technologies Inc. Third Quarter 2013 Earnings Conference Call. [Operator Instructions] At this time, I would now like to turn the conference over to Eric Dey, Chief Financial Officer. Please go ahead.

Good afternoon, everyone, and thank you for joining us today. By now, everyone should have access to our third quarter press release. It can also be found at www.fleetcor.com under the Investor Relations section. Throughout this conference call, we will be presenting non-GAAP financial information, including adjusted revenues, adjusted net income and EBITDA. This information is not calculated in accordance with GAAP, and may be calculated differently than other companies’ similarly titled non-GAAP information. Quantitative reconciliations of historical non-GAAP financial information to the most directly comparable GAAP information appears in today’s press release and on our website, as previously described. Also, we are providing 2013 guidance on a non-GAAP basis. Finally, before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements. This includes forward-looking statements about our 2013 guidance, new products and fee initiatives and potential business development and acquisitions. They are not guarantees of future performance and, therefore, you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Some of those risks are mentioned in today’s press release and Form 8-K filed with the Securities and Exchange Commission. Others are discussed in our annual report on Form 10-K. These documents are available on our website as previously described and at www.sec.gov. With that out of the way, I would like to turn the call over to Ron Clarke, our Chairman and CEO.

Okay. Eric, thanks. Good afternoon, everyone, and appreciate you joining the call today. I'm going to plan to cover just a couple of subjects upfront here. First, I'll comment on our Q3 results and our full year guidance. And then second, I'll discuss a bit the 2 newest acquisitions announced today, NexTraq and Epyx. Okay. So on to the quarter. Really a very good quarter for FleetCor. We reported profit growth of 30% on $1.08 in cash EPS and 20% revenue growth on $225 million of revenue. So 20% top line, 30% bottom line. And over the last 3 quarters, our profit growth, measured in cash EPS, has been, for Q1, it was 50%; for Q2, it was 35%; and this quarter, 30%. So 50%, 35% and 30%. So back to Q3. The drivers for the performance were really fourfold. So first, the U.S. organic growth this quarter of 14%, and really the same story driven by our universal products and our CLC business. International growth was also strong, led by our U.K. businesses, which grew 30% for the quarter. Third, we got help from our acquisitions, the Australia/New Zealand deals in the spring, along with a couple of months of our VB acquisition in Brazil. Just a reminder there, our NKT Russia deal and our CTF Brazil deal actually rolled off this quarter. And the fourth driver is a one-time happy from a favorable U.K. tax law change. That reduced our Q3 taxes by about $4 million, which increased cash EPS $0.05 for the quarter. So without this one-time tax happy, Q3 cash EPS would have been $1.03 instead of $1.08. And then lastly, offsetting these 4 positive drivers, we did have a bit of a headwind in FX, which reduced Q3 revenue in the range of $2 million…

Thank you, Ron. For the third quarter of 2013, we reported revenue of $225.2 million, an increase of 20% from the third quarter of 2012. Revenues from our North American segment increased 13.6% to $115.3 million from $101.5 million in the third quarter of 2012. Revenue from our international segment increased 28.6% to $109.9 million from $85.4 million in the third quarter of 2012. For the third quarter of 2013, GAAP net income increased 32% to $78.6 million or $0.93 per diluted share from $59.6 million or $0.69 per diluted share in the third quarter of 2012. The other financial metrics that we routinely use to measure our business are adjusted revenues and adjusted net income, which we sometimes also refer to as cash net income or cash EPS. Adjusted revenues equal our GAAP revenues, less merchant commissions. We use adjusted revenues as a basis to evaluate the company's revenues, net of the commissions that are paid to merchants who participate in certain card programs. The reconciliations of adjusted revenues and adjusted net income to our GAAP numbers are provided in Exhibit 1 of our press release. Adjusted revenues in the third quarter of 2013 increased 20% to $208.2 million compared to $174 million in the third quarter of 2012. Adjusted net income for the third quarter of 2013 increased 28% to $91.4 million or $1.08 per diluted share compared to $71.6 million or $0.83 per diluted share in the third quarter of 2012. Included in our net income for the third quarter was the impact of a one-time income tax benefit that resulted from legislation that was passed in the U.K. in the third quarter of 2013, which resulted in the U.K. statutory income tax rates being reduced. The lower statutory rates were applied to our deferred tax items,…

[Operator Instructions] And our first question comes from the line of Phil Stiller with Citi.

I just wanted to check the details of the acquisitions. Eric, I think you said you spent $400 million on the acquisitions. Was that just for the 2 that were announced today, or does that include the DB deal that closed here in October?

Hey, Phil. This is Eric. Yes, that was just for the 2 new deals, so it did not include DB.

Okay. And should we look at the $0.02 accretion in the fourth quarter as a run rate as to what these might contribute as we look forward? Or -- I know there's the deferred revenue headwind and some integration costs, or should we be thinking about a higher number next year?

Higher, Phil. It's Ron. Higher.

Yes, clearly, some of those -- I mean, the deal-related costs are going to spin out and eventually, we're going to lap the accounting adjustment we had to make in the Epyx deal because of deferred revenue issue, and that will fall off kind of as we get into the third quarter next year.

Okay. Are you guys willing to share how material the acquisitions were in terms of the revenue guidance adjustment for the full year?

Phil, we don't disclose specifics around each of the deals, Phil. I mean, as you can imagine, it's very sensitive information as we're a very acquisitive company. And disclosing that information certainly is not helpful when we have conversations with other people. So we really don't disclose specific metrics around each deal. But you could probably assume that from a purchase price perspective, I mean, the multiples would be in line with what we paid in other transactions for the most part.

Okay. That's helpful. And then last question for me. Obviously, you guys have done a lot of acquisitions here recently. Has this cleaned out the pipeline near term? Are you guys -- have enough on your plate to integrate here? Or should we be thinking about more deals as we move forward?

Phil, still busy, Phil. We've got a few small deals on the M&A side, and we've got a couple of, I'd say, material deals still in front of us on the partner side. So I'd say we continue to screen stuff.

How much financial ...

But you're right, we do now have a lot as of today on our plate.

And how much financial capacity will you have after these deals?

Hey, Phil. We still have pretty substantial liquidity. After giving effect of the deals we close in October, we probably have in the neighborhood of a couple of hundred million on the revolver and, obviously, we've got a fairly significant amount of cash around the world as well. And in addition to that, we also have the ability to draw an accordion feature that we have on our existing term facility. So from our perspective, I think we're in pretty good shape.

And we generate $400 million a year free cash flow. So I'd say, Phil, if you think out 6 months, those 3 or 4 things Eric named would give us all of the money we would certainly need next year.

Our next question comes from the line of Smitti from Morgan Stanley.

This is Danyal Hussain in for Smitti. So I just wanted to follow up on Phil's question, that if you look at the acquisitions you've done so far, you're almost at that $1 billion target that I think you laid out before. So is there a new amount that you guys think we should be thinking about between now and in 2015?

Yes, I would say the answer is we have that financial target of kind of $300 million to $400 million in terms of task in our deal team. But as you can imagine, deals are bumpy and so we did do a lot. But I would say it's still a good target to think about next year and the following in that same kind of $300 million to $400 million range.

Okay. And then for NexTraq, is that something you'd be able to scale up pretty much immediately throughout the U.S.?

I'd say our first priority is not necessarily to "scale it up." As I mentioned, in my opening remarks, the job 1 there is to prove or disprove whether we can sell that product line to our clients in a more effective way. So I'd say we'll spend probably the first 6 months proving that out. And if it's successful, if our clients want this set of services, which we think they will, then we'll step on the gas at that point.

Okay. And then my last question is just on Shell Europe. I'm just wondering if you guys have gone live in any more markets in the last quarter?

We haven't, although they've got a -- the SI in this case, a company called CGI, it's got a number of markets kind of queued up. So from our perspective, our app is kind of ready to go into a bunch more and we're just waiting for them to give the go-ahead.

Our next question comes from the line of Adam Carron with Barclays.

I guess first question was, in terms of these acquisitions that you guys announced, should we be thinking about these as kind of the way you've approached acquisitions historically in terms of the doubling the profitability over the first 1 to 2 years? Or do these kind of fall more in line with what we saw in Brazil where it's more of a longer-term strategic play?

I'd say the first thing, Adam, that you said. I think our thesis on these was twofold. One, that we could dramatically improve profit performance, which we believe we can. And then two, that they're big cross-selling opportunities because both of them share the same client base as ours. So that was the 1-2 punch.

Great. That's helpful. And then just a question for my own clarification. In terms of the NexTraq acquisition, I mean, how similar is this business to the business that you bought from Telenav? And kind of what's going to be the strategy in terms of combining both solution sets going forward, and how you'll look to go to market?

That's a really good question. The short answer is they're quite different. So this NexTraq deal, today's deal is what I'll call a traditional, kind of gidget-based, vehicle-based solution, kind of the traditional solution, that we look like a lot of other people in the marketplace with that solution. And the Telenav deal, which we announced in the spring, is really a handset, a phone-based solution where, again, our idea there is to create a FleetCor app that we could basically give to all of our clients and their drivers on their phone, basically not going into their gidgets. And so, they're pretty different in terms of what our objectives are, Adam, with the 2 businesses.

Great. That's helpful. And then just a last one for me. Do you guys have on-hand the organic growth for both North America and international during the quarter?

Yes, Smitti. The organic growth in North America -- oh, I'm sorry -- is mostly -- it's all organic in the U.S. effectively with the exception of the small Telenav acquisition, so it's just north of 10% in the U.S. And similarly, the international organic growth is in that kind of 10%, 11% kind of range as well when you factor out the acquisition.

Our next question comes from the line of David Togut with Evercore Partners.

The CLC had very strong revenue growth, 21% in the quarter, very consistent with Q2. On the Q2 call, you talked about introducing a new branded product for CLC. Can you give us an update on that?

Yes, David. It's Ron. Still no big contribution in this quarter from that. I think it's still a bit in the kitchen, that product. So Q3 was a repeat really of Q2. This CheckINN Direct, what we call our product for kind of small, midsized accounts was just, again, just selling out. We just sold a ton of that product again. So the growth in that business is taking this product that was originally designed for very, very large accounts and dialing it down to fit the needs of a 10-person company, and that's who's buying it.

Got it. And then when do you expect to introduce the new branded product?

It's kind of in test now. I'd say we'd probably start to see some impact Q1 next year.

Okay. Got it. And then direct MasterCard growth slowed to 19%, obviously still a very strong number, but down from low-30s in Q2. How should we think about or kind of model out the growth rate of that business? And, in particular, how much sales resources are you putting behind it over the next 12 months?

Yes, another good question. So I'd say that although we don't provide them, the volume dynamics looked similar this quarter to prior quarters, so the thing is still growing well volume-wise. We had a little bit of a rate hiccup, kind of fuel prices went south. And we took the gas off to get some more volume on some of the rate things. So I'd say that the volume grew faster historically than the rate here. And we actually just had a budget review this afternoon. We're going to keep investing more money, call it another 20% increment in 2014, to keep that line of business growing. So, again, there's almost unlimited demand geographically for the size accounts that we're going after. So it's really just a function of our sales investment.

Got it. And then you alluded to a possible launch at some point of a direct universal card in Europe and possibly tying a platform-based acquisition into doing that. Any update on the timing of such a new product?

Stay tuned. Not far away. Stay tuned, we'll be back to you.

Okay. And just, new Shell card in the U.S., when should we expect that launch?

It's live. It went live -- what are we now? The end of October? I think kind of the middle of September, David. They're boarding their first few clients. They're selling predominantly targeting larger clients on that product. They've done some kind of marketing launch. Their salespeople are basically in the market. They've built a pipeline. And we're literally putting the first few clients on that product as we speak.

I see. And final question for me, I think you alluded to the partner pipeline in your comments. When should we expect to see some of these larger partner deals be completed?

Yes, again, on the partner side, my comment is we've got a couple of what I would call material partner things and another handful of kind of processing-related opportunities. All international, every one of these opportunities is international. I would say you'll probably hear back from us before we break for the holidays.

[Operator Instructions] Our next question comes from the line of Tim Willi with Wells Fargo.

I just had 2 questions here. First is just from a modeling prospective. This seems to happen every year. I don't think I've asked this question before, but sequentially, your rev per tran in North America dips down from 2Q to 3Q. Is that just something seasonal, or is there something around mix or what have you to better understand that?

Hey, Tim. This is Eric. It's really nothing specific around that sequential drop. Effectively, if you look back at the last couple of years, Q2 in 2012 and Q2 in 2013 were both very good spread quarters versus the third quarter of last year and this year. So effectively, it's just that. So there's no real issue to it. [indiscernible] just kind of dropping between the quarters.

Yes. Got you. It makes sense. The other question was just sort of thinking about customer activity. I guess you're asked this, I think, on every call. I'll do it this time. But just anything around like same customer trends to sort of gauge the health of the economy in terms of what you're seeing in North America? And then maybe, I know you talked about the U.K. being up pretty dramatically on the revenue side. Just curious about same customer activity in that economy as well. Anything to point out?

Hey, Tim. It's Ron. I'd say it's marginally better, I guess would be my comment. It's not going backward anywhere now. It's obviously not "roaring." I'd say it obviously varies by market, but I'd say, it's kind of from flat to kind of low single-digits. We might get a couple of points of same-store growth now in a couple of markets. But our core tran growth, volume growth metric is still adding more clients, right, than we lose, adding more transactions basically than we lose is still the key to our volume growth. And although we didn't comment on it, we had a record quarter of what we call sales, which are new clients that we board in the quarter. The U.S. was up, I think I have it in front of me, 20% to 25%. Our Russia business was up 25%. Our CLC business was up like 40%. So we've had a great, really a great sales quarter and a great sales year, which although we don't talk about it because it's not in your guys' models is, again, I think a leading indicator of the health, that the core health of the company -- it says that the marketplace likes our products. So I'd say that that's what's driving most of our growth is new adds versus same store.

Thank you. And I'm showing no further questions in the queue at this time. Ladies and gentlemen, this does conclude our conference for today. Thank you for your participation. You may now disconnect.