EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: John Mongelli
Investor Relations
(770) 752-6171
CHOICEPOINT(R) REPORTS RECORD ANNUAL REVENUE AND EARNINGS PER SHARE
ALPHARETTA, GA. - JANUARY 26, 2005 - ChoicePoint Inc. (NYSE: CPS), today
reported fourth quarter total revenue growth of 16 percent compared to 2003.
Fourth quarter total revenue for 2004 was $232.5 million. Completing its fiscal
year, ChoicePoint total revenue was a record $918.7 million for 2004, a 15
percent increase over comparable revenue in 2003. Earnings per share ("EPS")
for the fourth quarter was $0.43 compared to $0.30 in 2003. The prior year
included a $0.05 per share dilutive effect due to a charge related to the
consolidation of certain of the Company's operations. Excluding this charge in
2003, EPS increased 23 percent for the fourth quarter of 2004 over 2003. Full
year 2004 EPS from continuing operations was $1.62 compared to $1.21 in 2003,
an increase of 34 percent. Full year EPS from continuing operations in 2003
included a $0.21 per share dilutive effect of a charge related to the
realignment and consolidations. Excluding this charge in 2003, EPS from
continuing operations increased 14 percent for the full year 2004 over 2003.
"Our strong fourth quarter caps off another outstanding year for ChoicePoint
and our shareholders," commented Derek V. Smith. "In addition to these strong
full-year financial results, we've significantly enhanced our analytic and
distribution offerings to provide end-to-end customer solutions. Given our
unique capabilities and growing demand for our services, we're well positioned
to continue our successful track record of financial performance while helping
to create a safer, more secure world through the responsible use of
information."
Chief Financial Officer Steven W. Surbaugh added, "I am extremely pleased with
our results this quarter and the operating momentum we continue to see in our
businesses, which position us for another very good year in 2005. For the
full-year, core revenue grew a strong 18 percent, enabling us to deliver strong
earnings and record cash flows."
ChoicePoint Earnings
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FINANCIAL HIGHLIGHTS - FOURTH QUARTER
- Core or service revenue (total revenue less reimbursable
expenses) increased 19 percent to $224.9 million for the
quarter ended December 31, 2004 from $188.5 million for the
same period of 2003. Internal revenue (core revenue less
revenue from acquisitions) increased 8.2 percent over 2003,
driven primarily by continued strong growth within our
Insurance Services segment, and solid performances in our
background screening, tenant screening and vital records
businesses in our Business Services segment. Fourth quarter
total revenue increased 16 percent to $232.5 million in 2004
from $200.0 million in 2003.
- Operating income for the fourth quarter of 2004 was $64.0
million compared to $44.3 million for 2003. Excluding the
realignment charges discussed below, operating income was
$51.4 million for the fourth quarter of 2003.
- In the fourth quarter of 2003, the Company recorded a pre-tax
charge of $7.1 million ($4.4 million net of taxes) for the
further consolidation of some of our public records and
workplace solutions businesses and the reengineering of our
direct marketing businesses.
- During the quarter ended December 31, 2004, the Company
expanded its analytic capabilities in the Insurance Services
segment and acquired two providers of rating services to
insurance carriers and agents, InsurQuote, Inc., located in
Orem, Utah and Priority Data Systems, Inc., located in Omaha,
Nebraska. To further expand its employment services in the
Business Services segment, the Company also acquired certain
assets of USAHire, LLC, an applicant tracking software
provider located in Charlotte, North Carolina. Subsequent to
year end, the Company also acquired i2 Limited, a Cambridge,
UK-based provider of visual investigative and link analysis
software for intelligence, law enforcement, military and
large commercial applications.
FINANCIAL HIGHLIGHTS - FULL YEAR
- Core revenue increased 18 percent to $884.4 million for the
year ended December 31, 2004 from $750.4 million for 2003.
Excluding the impact of acquisitions, internal revenue
increased 8.0 percent over 2003, driven by consistent growth
by our Insurance Services products, and strong performances
in our background screening, tenant screening and vital
records businesses in our Business Services segment. Total
revenue increased 15 percent to $918.7 million in 2004 from
$795.7 million in 2003.
ChoicePoint Earnings
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- Operating income for the year ended December 31, 2004 was
$241.8 million compared to $178.6 million for 2003, an
increase of 35 percent. Excluding the 2003 realignment
charges discussed below, operating income was $209.5 million
for 2003 compared to $241.8 million in 2004, representing a
15 percent year over year increase.
- During 2003, the Company recorded a $61.2 million pre-tax
gain on the sale of our CP Commercial Specialists ("CPCS")
business ($32.9 million after tax) and pre-tax other
operating charges totaling $30.9 million ($19.1 million net
of taxes) related to the realignment of our technology
infrastructure and operations following the divesiture of
CPCS, the transition to our new data center, the
reengineering of our direct marketing businesses and the
further consolidation of some of our public records and
workplace solutions businesses.
- Net free cash flow (net cash provided by operating activities
of continuing operations of $248.1 million less capital
expenditures of $66.0 million) was $182.1 million for the
year ended December 31, 2004, which compares to net free cash
flow of $152.4 million for 2003, or an increase of
approximately 20 percent.
- Net debt (total debt less cash) for the year ended December
31, 2004, increased by $19.9 million from December 31, 2003,
to $48.5 million, as we used cash from operations to fund our
ten acquisitions totaling approximately $229 million in 2004.
During the fourth quarter we entered into a new revolving
credit facility for $400 million, which is expandable to $500
million, and terminated our previous $325 million revolving
credit facility. The remaining debt capacity at December 31,
2004 under our committed financing lines is $450 million.
OPERATIONAL HIGHLIGHTS
INSURANCE SERVICES
- Total revenue increased 13 percent to $87.0 million in the
fourth quarter of 2004 compared to $77.0 million in the prior
year, representing an internal revenue growth rate of 10.3
percent. For the year ended December 31, total revenue
increased 14 percent, with an internal growth rate of 12.2
percent, to $352.7 million in 2004 from $309.1 million in
2003 due primarily to unit growth and new product
contributions in personal lines.
- Operating income in Insurance Services was $49.3 million for
the fourth quarter of 2004, resulting in an operating profit
margin of 56.7 percent, and an increase from $41.7 million in
ChoicePoint Earnings
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the fourth quarter of 2003. For the full year, operating
income was $195.7 million, up 13 percent from $172.5 million
in 2003, resulting in an operating margin of 55.5 percent in
2004 compared to 55.8 percent in 2003.
BUSINESS SERVICES
- Fourth quarter total revenue increased 30 percent to $92.4
million in 2004 compared to $71.2 million in the prior year,
primarily due to solid internal revenue growth and revenue
from acquisitions completed during 2004 and the last quarter
of 2003. Internal revenue increased 11.0 percent for the
fourth quarter of 2004 over the comparable period in 2003,
driven primarily by increased volumes including market share
gains in our background screening, tenant screening and vital
records businesses. For the year ended December 31, 2004,
total revenue increased 27 percent, with an internal revenue
growth rate of 10.3 percent, to $349.9 million in 2004 from
$276.1 million in 2003.
- Operating income in Business Services was $20.9 million for
the fourth quarter of 2004 resulting in an operating profit
margin of 22.7 percent and a 46 percent increase from $14.4
million in the same period of the prior year. For the full
year, operating income was $73.4 million, compared to $56.5
million in 2003, resulting in an operating margin of 21.0
percent in 2004 compared to 20.5 percent in 2003.
GOVERNMENT SERVICES
- Total revenue increased 28 percent to $21.1 million in the
fourth quarter of 2004 compared to $16.4 million in the
fourth quarter of 2003, primarily due to revenue from the
acquisitions of Templar and iMap in the first quarter of
2004. Internal revenue declined 5.9 percent for the fourth
quarter of 2004 over the same period in 2003, due primarily
to the timing of governmental contracts at our Bode
operations. For the year ended December 31, revenue increased
33 percent, to $83.9 million in 2004 from $63.3 million in
2003.
- Operating income in Government Services was $5.3 million for
the fourth quarter of 2004, increasing from $3.9 million in
the prior year, primarily due to the revenue growth discussed
above offset partially by investments in new product
development. Operating profit margin in Government Services
for the fourth quarter was 25.4 percent in 2004 compared to
23.9 percent in 2003. For the full year, operating income was
$21.5 million, increasing 48 percent from $14.5 million in
2003, resulting in an operating margin of 25.6 percent in
2004 compared to 23.0 percent in 2003, due primarily to
product mix and various cost synergies realized through
acquisitions.
ChoicePoint Earnings
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MARKETING SERVICES
- Continuing the positive growth trends started last quarter,
Marketing Services' core revenue for the fourth quarter
increased 4 percent from prior year revenue of $22.8 million
to $23.8 million for 2004, with internal revenue growth
representing the entire increase. Total revenue for the
Marketing Services segment (which includes all of the
Company's revenue from reimbursable expenses) decreased 9
percent from $34.3 million in 2003 to $31.3 million in 2004
solely due to the decrease in reimbursables revenue. For the
year ended December 31, core revenue decreased 3 percent, to
$93.4 million in 2004 from $96.6 million in 2003 and total
revenue declined 10 percent from $142.0 million in 2003 to
$127.7 million in 2004 due primarily to weakness in our print
products and the downsizing of our e-mail marketing business
in late 2003. The Company excludes the revenue from
reimbursable expenses in its operational analyses because
these items are fully reimbursed by our customers without
markup and have no impact on operating income, net income,
EPS, cash flows or the balance sheet.
- Operating income in Marketing Services was $5.4 million for
the fourth quarter of 2004, a 35 percent increase over $4.0
million in the prior year due to the aforementioned revenue
growth and cost control initiatives implemented in prior
quarters. Fourth quarter operating profit margin, as a
percentage of revenue without reimbursable expenses, was 22.6
percent (17.1 percent of total revenue) compared to 17.5
percent in the fourth quarter of 2003 (11.6 percent of total
revenue). For the full year, operating income was $18.7
million, down 15 percent from $21.8 million in 2003,
resulting in an operating margin of 20.0 percent in 2004
compared to 22.6 percent in 2003. This decrease in full year
operating income is primarily due to the aforementioned full
year revenue decline offset partially by cost control
initiatives implemented by the business.
OUTLOOK
Based on recent business trends and the impact of acquisitions closed during
2004 and early 2005, ChoicePoint expects full year 2005 core revenue growth in
the 15 to 18 percent range and full year 2005 operating margins to be in the
low-to-mid 27 percent range, consistent with 2004 margins.
ChoicePoint Earnings
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WEBCAST
ChoicePoint's fourth quarter results will be discussed in more detail on
January 26, 2005, at 8:30 a.m. EST via teleconference. The live audio Webcast
of the call will be available on ChoicePoint's Web site at www.choicepoint.com.
There will also be a replay of the call available beginning at approximately
10:00 a.m. EST at the same Web address.
ABOUT CHOICEPOINT
ChoicePoint Inc. (NYSE: CPS) is the leading provider of identification and
credential verification services for making smarter decisions in a world
challenged by increased risks. Serving the needs of business, government,
non-profit organizations and individuals, ChoicePoint works to create a safer
and more secure society through the responsible use of information while
ensuring the protection of personal privacy. For more information about
ChoicePoint, visit the Company's Web site at www.choicepoint.com.
Forward-Looking Statements
Certain written statements in this release and oral statements made by or on
behalf of the Company may constitute "forward-looking statements" as defined
under the Private Securities Litigation Reform Act of 1995. Words or phrases
such as "should result," "are expected to," "we anticipate," "we estimate," "we
project," or similar expressions are intended to identify forward-looking
statements. These statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those expressed in
any forward-looking statements. These risks and uncertainties include, but are
not limited to, the following important factors: demand for the Company's
services, product development, maintaining acceptable margins, ability to
control costs, the impact of federal, state and local regulatory requirements
on the Company's business, including the direct marketing and public records
markets and privacy matters affecting the Company, the impact of competition
and the uncertainty of economic conditions in general. Additional information
concerning these and other risks and uncertainties is contained in the
Company's filings with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K for the year ended December 31, 2003.
Readers are cautioned not to place undue reliance on forward-looking
statements, since the statements speak only as of the date that they are made,
and the Company undertakes no obligation to publicly update these statements
based on events that may occur after the date of this press release.
ChoicePoint Earnings
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CHOICEPOINT INC.
Financial Highlights
(Unaudited) Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
(Dollars in thousands, except per share data) 2004 2003 2004 2003
-------- -------- -------- --------
Service revenue (a) .................................................. $224,882 $188,451 $884,433 $750,351
Reimbursable expenses per EITF 01-14 (b) ............................. 7,580 11,579 34,280 45,395
-------- -------- -------- --------
Total revenue ........................................................ 232,462 200,030 918,713 795,746
======== ======== ======== ========
Cost of revenue ...................................................... 111,793 102,412 457,842 402,148
Reimbursable expenses ................................................ 7,580 11,579 34,280 45,395
Selling, general and administrative expenses ......................... 49,109 34,616 184,813 138,701
Other operating charges (c) .......................................... -- 7,103 -- 30,942
-------- -------- -------- --------
Total costs and expenses ............................................. 168,482 155,710 676,935 617,186
-------- -------- -------- --------
Operating income (d) ................................................. 63,980 44,320 241,778 178,560
Interest expense ..................................................... 726 637 2,948 3,061
-------- -------- -------- --------
Income from continuing operations before income taxes ................ 63,254 43,683 238,830 175,499
Provision for income taxes ........................................... 24,037 16,774 90,875 67,391
-------- -------- -------- --------
Income from continuing operations .................................... 39,217 26,909 147,955 108,108
Income from discontinued operations, net of taxes (e) ................ -- -- -- 991
Gain on sale of discontinued operations, net of taxes (e) ............ -- -- -- 32,893
-------- -------- -------- --------
Net income ........................................................... $ 39,217 $ 26,909 $147,955 $141,992
======== ======== ======== ========
EPS - diluted:
Income from continuing operations ........................... $ 0.43 $ 0.30 $ 1.62 $ 1.21
Discontinued operations, net of taxes ....................... -- -- -- 0.01
Gain on sale of discontinued operations, net of taxes ....... -- -- -- 0.37
-------- -------- -------- --------
Net Income .................................................. $ 0.43 $ 0.30 $ 1.62 $ 1.58
======== ======== ======== ========
Weighted average shares - diluted .................................. 91,830 89,923 91,305 89,686
======== ======== ======== ========
Operating Income ..................................................... $ 63,980 $ 44,320 $241,778 $178,560
Depreciation and amortization expense ................................ 15,613 13,225 61,346 53,120
-------- -------- -------- --------
EBITDA (f) ........................................................... $ 79,593 $ 57,545 $303,124 $231,680
======== ======== ======== ========
ChoicePoint Earnings
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CHOICEPOINT INC.
Financial Highlights (continued)
RECONCILIATION TO FINANCIAL INFORMATION EXCLUDING OTHER OPERATING CHARGES (C)
(Unaudited) Three Months Ended Year Ended
December 31, December 31,
----------------------- -------------------------
(Dollars in thousands, except per share data) 2004 2003 2004 2003
-------- -------- --------- ---------
Operating income (d) ................................................. $ 63,980 $ 44,320 $ 241,778 $ 178,560
Add back: other operating charges (c) ................................ -- 7,103 -- 30,942
-------- -------- --------- ---------
Operating income before other operating charges ...................... 63,980 51,423 241,778 209,502
Interest Expense ..................................................... (726) (637) (2,948) (3,061)
-------- -------- --------- ---------
Income from continuing operations before income taxes & other
operating charges .................................................. 63,254 50,786 238,830 206,441
Provision for income taxes ........................................... 24,037 19,502 90,875 79,273
-------- -------- --------- ---------
Income from continuing operations before other operating charges ..... $ 39,217 $ 31,284 $ 147,955 $ 127,168
======== ======== ========= =========
Effective tax rate ................................................... 38.0% 38.4% 38.1% 38.4%
Earnings per share - diluted excluding other operating charges ....... $ 0.43 $ 0.35 $ 1.62 $ 1.42
EBITDA excluding other operating charges (f) ......................... $ 79,593 $ 64,648 $ 303,124 $ 262,622
(a) Service revenue excludes revenue from reimbursable expenses (see (b)
below). The Company uses service revenue (also referred to as core
revenue) to measure its continuing operations without the effect of
reimbursable expenses.
(b) Reimbursable expenses per Emerging Issues Task Force ("EITF") 01-14
represent out-of-pocket expenses fully reimbursed by ChoicePoint's
customers and recorded as revenues and expenses in accordance with
EITF 01-14 "Income Statement Characterization of Reimbursements
Received for 'Out-of-Pocket' Expenses Incurred". As these expenses are
fully reimbursed, without mark-up, by our customers and in a majority
of cases prepaid by the customers, there is no impact on operating
income, net income, EPS, cash flows or the balance sheet. In addition,
management excludes these expenses from its revenue analysis for
operational management and incentive purposes; therefore, we have
separately identified these expenses and excluded their impact in our
calculations of core revenue, internal revenue growth and operating
margins. Other pass-through expenses such as motor vehicle registry
fees will continue to be accounted for on a net basis and, as such,
excluded from revenues in our financial statements in accordance with
generally accepted accounting principles. Fourth quarter pass-through
expenses totaled $157.7 million in 2004 and $148.4 million in 2003.
Pass-through expenses for the full year were $644.7 million in 2004
compared to $597.6 million in 2003.
(c) The Company recorded other operating charges of $7.1 million in the
fourth quarter of 2003 and $30.9 million for the year ended December
31, 2003 ($4.4 million and $19.1 million net of taxes, respectively)
as a result of the realignment of our technology infrastructure and
operations following the divestiture of our CPCS business, the
transition to our new data center and the further consolidation of
some of our public records and workplace solutions operations. This
2003 charge included asset impairments of $21.3 million primarily
related to closed facilities or abandoned technology in the
realignment, $4.4 million in severance and termination benefits, and
$5.2 million of abandoned lease and other contractual commitments. The
Company has presented analysis with and without these items because
they represent costs that management excludes in its assessments of
operating results and in determining operational incentive awards.
(d) Third quarter 2004 operating income includes a $3.5 million gain on
the sale of our minority investment in a start-up company offset by
revisions to litigation accruals on an outstanding legal action and
the closure of certain operating facilities during the quarter.
(e) On February 28, 2003, the Company sold its CPCS operating unit. The
pre-tax proceeds from the sale of CPCS were approximately $87 million.
CPCS is reported as a discontinued operation for all periods presented
and the results of its operations are reflected separately from the
results of continuing operations.
(f) Earnings before interest, taxes, depreciation and amortization
("EBITDA") and EBITDA before other operating charges (see note c) are
not presented as substitutes for operating income, net income or cash
flows from operating activities. The Company has included EBITDA and
EBITDA before other operating charges (which are not measures of
financial performance under generally accepted accounting principles)
because such data is used by the Company to compare its performance to
its competitors and to manage its on-going business and is also used
by certain investors to analyze and compare companies on the basis of
operating performance.
ChoicePoint Earnings
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CHOICEPOINT INC.
Financial Highlights (continued)
(Unaudited) Year ended
December 31,
-----------------------------
(Dollars in thousands) 2004 2003
--------- ---------
CASH FLOW HIGHLIGHTS
Income from continuing operations ...................................... $ 147,955 $ 108,108
Depreciation & amortization ............................................ 61,346 53,120
Changes in assets & liabilities and other .............................. 38,819 33,059
--------- ---------
Net cash provided by operating activities of continuing operations ..... $ 248,120 $ 194,287
Net cash provided (used) by activities of discontinued operations ...... $ 500 $ (38,609)
Acquisitions & investments, net of cash acquired ....................... $(229,314) $ (93,567)
Cash proceeds from sale of business and minority investment ............ 3,549 87,000
Capital expenditures ................................................... (66,038) (41,931)
--------- ---------
Net cash (used) provided by investing activities ....................... $(291,803) $ (48,498)
Net cash provided (used) by financing activities ....................... $ 21,350 $(118,129)
KEY BALANCE SHEET HIGHLIGHTS ........................................... 12/31/04
---------
Total Debt ............................................................. $ 50,100
Cash ................................................................... 1,577
---------
Debt (net of cash) ..................................................... $ 48,523
Shareholders' Equity ................................................... $ 983,659
Days sales outstanding (adjusted for pass-through expenses) ............ 41 days
ChoicePoint Earnings
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CHOICEPOINT INC.
2004 SEGMENT RESULTS
Q1 2004 Q2 2004 Q3 2004 Q4 2004 Total 2004
--------- --------- --------- --------- ----------
REVENUE
Insurance Services $ 86,727 $ 88,129 $ 90,880 $ 86,989 $ 352,725
Business Services 75,941 87,547 94,041 92,352 349,881
Government Services 17,741 23,530 21,590 21,073 83,934
Marketing Services 22,811 23,224 23,585 23,769 93,389
Royalty 1,165 1,270 1,370 699 4,504
--------- --------- --------- --------- ---------
Service Revenue 204,385 223,700 231,466 224,882 884,433
Reimbursable Expenses per EITF 01-14 12,860 7,691 6,149 7,580 34,280
--------- --------- --------- --------- ---------
Total Revenue $ 217,245 $ 231,391 $ 237,615 $ 232,462 $ 918,713
========= ========= ========= ========= =========
OPERATING INCOME
Insurance Services $ 47,260 $ 48,401 $ 50,714 $ 49,340 $ 195,715
Business Services 14,357 17,052 21,084 20,945 73,438
Government Services 4,114 7,275 4,726 5,349 21,464
Marketing Services 4,287 4,408 4,583 5,373 18,651
Royalty 204 661 798 399 2,062
Corporate & Shared Expenses (a) (15,951) (18,306) (17,869) (17,426) (69,552)
--------- --------- --------- --------- ---------
Operating Income $ 54,271 $ 59,491 $ 64,036 $ 63,980 $ 241,778
========= ========= ========= ========= =========
CORE REVENUE GROWTH RATES
Insurance Services 13.9% 13.1% 16.4% 13.0% 14.1%
Business Services 18.9% 26.9% 30.5% 29.7% 26.7%
Government Services 3.5% 59.2% 43.8% 28.4% 32.5%
Marketing Services -10.8% -9.5% 4.2% 4.4% -3.4%
Continuing operations 11.1% 18.5% 22.4% 19.3% 17.9%
INTERNAL REVENUE GROWTH RATES
Insurance Services 12.2% 11.4% 14.8% 10.3% 12.2%
Business Services 13.3% 9.2% 8.1% 11.0% 10.3%
Government Services -12.8% 6.3% -0.8% -5.9% -3.7%
Marketing Services -10.8% -9.5% 4.2% 4.4% -3.4%
Continuing operations 6.9% 7.2% 9.7% 8.2% 8.0%
OPERATING PROFIT MARGINS
Insurance Services 54.5% 54.9% 55.8% 56.7% 55.5%
Business Services 18.9% 19.5% 22.4% 22.7% 21.0%
Government Services 23.2% 30.9% 21.9% 25.4% 25.6%
Marketing Services (b) 18.8% 19.0% 19.4% 22.6% 20.0%
Operating income as a percentage of service revenue 26.6% 26.6% 27.7% 28.5% 27.3%
Operating income as a percentage of 25.0% 25.7% 26.9% 27.5% 26.3%
total revenue
(a) Corporate and shared expenses represent costs of support functions,
research and development initiatives, incentives and profit sharing
that benefit all segments.
(b) Represents operating income as a percentage of service revenue.
Operating profit margin as a percentage of total revenue was 12.0%,
14.3%, 15.4% and 17.1% for the first, second, third and fourth
quarters of 2004, respectively, 14.6% for the total year 2004, 18.9%,
20.4%, 10.2%, and 11.6% for the first, second, third and fourth
quarters of 2003, respectively, and 15.4% for the total year 2003.
ChoicePoint Earnings
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CHOICEPOINT INC.
2003 SEGMENT RESULTS
Q1 2003 Q2 2003 Q3 2003 Q4 2003 Total 2003
--------- --------- --------- --------- ----------
REVENUE
Insurance Services $ 76,134 $ 77,922 $ 78,100 $ 76,968 $ 309,124
Business Services (c) 63,859 69,014 72,069 71,206 276,148
Government Services (c) 17,136 14,778 15,011 16,410 63,335
Marketing Services 25,573 25,676 22,631 22,762 96,642
Royalty 1,303 1,389 1,305 1,105 5,102
--------- --------- --------- --------- ---------
Service Revenue 184,005 188,779 189,116 188,451 750,351
Reimbursable Expenses per EITF 01-14 10,944 10,470 12,402 11,579 45,395
--------- --------- --------- --------- ---------
Total Revenue $ 194,949 $ 199,249 $ 201,518 $ 200,030 $ 795,746
========= ========= ========= ========= =========
OPERATING INCOME
Insurance Services $ 42,436 $ 44,364 $ 43,998 $ 41,720 $ 172,518
Business Services (c) 11,172 15,321 15,694 14,353 56,540
Government Services (c) 4,399 3,264 2,958 3,919 14,540
Marketing Services 6,908 7,374 3,580 3,987 21,849
Royalty 646 626 416 380 2,068
Corporate & Shared Expenses (a) (13,758) (16,469) (14,850) (12,936) (58,013)
--------- --------- --------- --------- ---------
Operating Income before other charges (d) $ 51,803 $ 54,480 $ 51,796 $ 51,423 $ 209,502
========= ========= ========= ========= =========
Other operating charges (d) -- (19,817) (4,022) (7,103) (30,942)
--------- --------- --------- --------- ---------
Operating Income $ 51,803 $ 34,663 $ 47,774 $ 44,320 $ 178,560
========= ========= ========= ========= =========
CORE REVENUE GROWTH RATES
Insurance Services 18.7% 16.2% 10.8% 12.2% 14.4%
Business Services (c) 11.9% 10.1% 18.9% 20.7% 15.4%
Government Services (c) 42.4% 13.2% -19.6% -36.0% -8.7%
Marketing Services 7.8% -8.1% -17.6% -14.7% -8.7%
Continuing operations 16.0% 9.6% 5.8% 4.1% 8.6%
INTERNAL REVENUE GROWTH RATES
Insurance Services 17.2% 15.0% 10.1% 9.5% 12.8%
Business Services (c) -4.2% -5.8% 0.9% 5.0% -1.1%
Government Services (c) 42.4% 13.2% -19.6% -36.0% -8.7%
Marketing Services -2.4% -13.6% -21.7% -18.7% -14.5%
Continuing operations 8.1% 2.4% -1.2% -2.6% 1.5%
OPERATING PROFIT MARGINS
Insurance Services 55.7% 56.9% 56.3% 54.2% 55.8%
Business Services (c) 17.5% 22.2% 21.8% 20.2% 20.5%
Government Services (c) 25.7% 22.1% 19.7% 23.9% 23.0%
Marketing Services (b) 27.0% 28.7% 15.8% 17.5% 22.6%
Operating income before other operating 28.2% 28.9% 27.4% 27.3% 27.9%
charges, percentage of service revenue (d)
Operating income as a percentage of 26.6% 17.4% 23.7% 22.2% 22.4%
total revenue
(c) In 2004, the Company reorganized its product lines in the Business &
Government segment into two separate reportable segments. Historical
information has been reclassified to conform with the current
presentation.
(d) The Company has presented analysis above with and without these items
because they represent costs that management excludes in its
assessments of operating results and in determining operational
incentive awards.
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