Annual Reports

 
Quarterly Reports

  • 10-Q (Oct 29, 2009)
  • 10-Q (Jul 30, 2009)
  • 10-Q (Apr 30, 2009)
  • 10-Q (Oct 30, 2008)
  • 10-Q (Jul 31, 2008)
  • 10-Q (May 1, 2008)

 
8-K

 
Other

First Advantage 10-Q 2009

Documents found in this filing:

  1. 10-Q
  2. Ex-10
  3. Ex-31.1
  4. Ex-31.2
  5. Ex-32.1
  6. Ex-32.2
  7. Ex-32.2
form10_q.htm

UNITED STATES>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2009

OR

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period from ________ to ­­________
 
 
Commission file number:  001-31666
 
FIRST ADVANTAGE CORPORATION
(Exact name of registrant as specified in its charter)

 
  Incorporated in Delaware   
(State or other jurisdiction of incorporation or organization)
 
 
 61-1437565
(I.R.S. Employer Identification Number)
 

12395 First American Way
Poway, California 92064
 (Address of principal executive offices, including zip code)

(727) 214-3411
(Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for shorter period that the registrant was required to submit and post such files).  Yes [ ] No [ ]
 
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):
 
 
Large accelerated filer     [ ]         Accelerated filer       [X]        Non-accelerated filer    [ ]
 
 
Smaller reporting company [ ]

 
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12-b).    Yes [ ] No [X]

There were 12,063,733 shares of outstanding Class A Common Stock of the registrant as of July 27, 2009.
There were 47,726,521 shares of outstanding Class B Common Stock of the registrant as of July 27, 2009.
 
 
 
Part I:  FINANCIAL INFORMATION
 
                 1
                     
       2
 
 
               
       3
                     
     4
                     
       5
 
 
                 
       6
                     
           8
                     
    18
                     
        30
 
                 
                30

Part II:  OTHER INFORMATION
 
      30
             
       30
             
 30
             
     30
             
 31
             
      31
             
         31
           
 Signatures          32



PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements
 
First Advantage Corporation
Consolidated Financial Statements (Unaudited)
For the Three and Six Months Ended
June 30, 2009 and 2008



 
1

 
First Advantage Corporation

Consolidated Balance Sheets (Unaudited)
 
(in thousands)
June 30,
 
December 31,
 
2009
 
2008
Assets
     
Current assets:
     
    Cash and cash equivalents
$           60,478
 
$           52,361
    Accounts receivable (less allowance for doubtful accounts
     
     of $11,977 and $8,345, respectively)
118,702
 
121,531
    Prepaid expenses and other current assets
9,634
 
9,032
    Due from affiliates
              2,908
 
                   -
    Deferred income tax asset
            16,846
 
            16,695
       Total current assets
208,568
 
199,619
Property and equipment, net
78,982
 
81,807
Goodwill
752,491
 
731,369
Customer lists, net
48,507
 
53,813
Other intangible assets, net
15,311
 
17,245
Database development costs, net
12,191
 
11,837
Marketable equity securities
43,389
 
30,365
Other assets
3,300
 
3,684
       Total assets
$      1,162,739
 
$      1,129,739
       
Liabilities and Equity
     
Current liabilities:
     
    Accounts payable
$           37,346
 
$           38,404
    Accrued compensation
22,367
 
32,423
    Accrued liabilities
13,511
 
11,379
    Deferred income
6,755
 
7,381
    Income tax payable
              1,037
 
2,609
    Due to affiliates
                   -
 
714
    Current portion of long-term debt and capital leases
8,807
 
9,891
       Total current liabilities
89,823
 
102,801
Long-term debt and capital leases, net of current portion
29,357
 
22,938
Deferred income tax liability
68,429
 
61,652
Other liabilities
4,971
 
5,300
       Total liabilities
192,580
 
192,691
Equity:
     
    First Advantage Corporations Stockholders' Equity:
     
    Preferred stock, $.001 par value; 1,000 shares authorized, no shares issued or outstanding
  -   
    Class A common stock, $.001 par value; 125,000 shares authorized;
     
        12,061 and 11,772 shares issued and outstanding as of      
    June 30, 2009 and December 31, 2008, respectively
12
 
12
    Class B common stock, $.001 par value; 75,000 shares authorized; 47,727 shares issued
     
    and outstanding as of June 30, 2009 and December 31, 2008, respectively
48
 
48
    Additional paid-in capital
501,324
 
502,600
    Retained earnings
414,187
 
390,602
    Accumulated other comprehensive income (loss)
10,124
 
(412)
       Total First Advantage Corporation's stockholders' equity
925,695
 
892,850
    Noncontrolling interests
44,464
 
44,198
       Total equity
970,159
 
937,048
       Total liabilities and equity
$      1,162,739
 
$      1,129,739
 
The accompanying notes are an integral part of these consolidated financial statements.
2

 
First Advantage Corporation

Consolidated Statements of Income (Unaudited)
      
(in thousands, except per share amounts)
For the Three Months Ended
 
For the Six Months Ended
 
 
June 30,
 
June 30,
 
 
2009
 
2008
 
2009
 
2008
 
                 
Service revenue
$ 164,668   $ 182,423   $ 354,708   $ 370,677  
Reimbursed government fee revenue
  13,341     13,122     26,319     27,147  
    Total revenue
  178,009     195,545     381,027     397,824  
Cost of service revenue
  58,261     53,487     139,601     107,203  
Government fees paid
  13,341     13,122     26,319     27,147  
    Total cost of service
  71,602     66,609     165,920     134,350  
    Gross margin
  106,407     128,936     215,107     263,474  
Salaries and benefits
  48,130     62,927     101,297     129,376  
Facilities and telecommunications
  6,865     8,084     13,524     16,284  
Other operating expenses
  18,597     22,909     37,944     45,743  
Depreciation and amortization
  10,895     10,726     21,581     20,622  
Impairment loss
  -     297     -     297  
    Total operating expenses
  84,487     104,943     174,346     212,322  
    Income from operations
  21,920     23,993     40,761     51,152  
Other (expense) income:
                       
   Interest expense
  (294 )   (1,075 )   (669 )   (1,500 )
   Interest income
  71     172     284     591  
    Total other (expense), net
  (223 )   (903 )   (385 )   (909 )
Income from continuing operations before income taxes
  21,697     23,090     40,376     50,243  
Provision for income taxes
  9,112     9,676     16,958     20,650  
Income from continuing operations
  12,585     13,414     23,418     29,593  
Loss from discontinued operations, net of tax
  -     (1,264 )   -     (4,241 )
Net income
  12,585     12,150     23,418     25,352  
    Less:  Net loss attributable to noncontrolling interest
  (386 )   (238 )   (167 )   (325 )
Net income attributable to First Advantage Corporation ("FADV")
$ 12,971   $ 12,388   $ 23,585   $ 25,677  
Basic income per share:
                       
    Income from continuing operations attributable to FADV shareholders
$ 0.22   $ 0.23   $ 0.40   $ 0.50  
    Loss from discontinued operations attributable to FADV shareholders, net of tax
  -     (0.02 )   -     (0.07 )
    Net income attributable to FADV shareholders
$ 0.22   $ 0.21   $ 0.40   $ 0.43  
Diluted income per share:
                       
    Income from continuing operations attributable to FADV shareholders
$ 0.22   $ 0.23   $ 0.39   $ 0.50  
    Loss from discontinued operations attributable to FADV shareholders, net of tax
  -     (0.02 )   -     (0.07 )
    Net income attributable to FADV shareholders
$ 0.22   $ 0.21   $ 0.39   $ 0.43  
Weighted-average common shares outstanding:
                       
    Basic
  59,776     59,435     59,681     59,297  
    Diluted
  59,898     59,617     59,764     59,374  
Amounts attributable to FADV shareholders:
                       
    Income from continuing operations, net of tax
$ 12,971   $ 13,652   $ 23,585   $ 29,918  
    Loss from discontinued operations, net of tax
  -     (1,264 )   -     (4,241 )
    Net income
$ 12,971   $ 12,388   $ 23,585   $ 25,677  
 
The accompanying notes are an integral part of these consolidated financial statements.
3

 
First Advantage Corporation

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)


   
Three Months Ended
   
Six Months Ended
 
(in thousands)
 
June 30,
   
June 30,
 
   
2009
   
2008
   
2009
   
2008
 
Net income
  $ 12,585     $ 12,150     $ 23,418     $ 25,352  
Other comprehensive income (loss) , net of tax:
                               
    Foreign currency translation adjustments
    3,572       (670 )     2,803       2,080  
    Unrealized gain (loss) on investment, net of tax
    5,915       (9,230 )     7,733       (29,719 )
Total other comprehensive income (loss) , net of tax
  $ 9,487     $ (9,900 )   $ 10,536     $ (27,639 )
Comprehensive income (loss)
  $ 22,072     $ 2,250     $ 33,954     $ (2,287 )
    Comprehensive loss attributable to the noncontrolling interest
    (386 )     (238 )     (167 )     (325 )
Comprehensive income (loss) attributable to FADV
  $ 21,686     $ 2,012     $ 33,787     $ (2,612 )



The accompanying notes are an integral part of these consolidated financial statements.
 
4

 
First Advantage Corporation

 
Consolidated Statement of Changes in Equity
For the Six Months Ended June 30, 2009 (Unaudited)



                   
Accumulated
           
(in thousands)
 
Common
 
Common
 
Additional
     
Other
           
   
Stock
 
Stock
 
Paid-in
 
Retained
 
Comprehensive
 
Noncontrolling
       
   
Shares
 
Amount
 
Capital
 
Earnings
 
(Loss) Income
 
Interests
   
Total
 
Balance at December 31, 2008
    59,499   $ 60   $ 502,600   $ 390,602   $ (412 ) $ 44,198     $ 937,048  
Net income
    -     -     -     23,585     -     (167 )     23,418  
  Purchase of subsidiary shares from
                                             
   noncontrolling interest
    -     -     (5,506 )   -     -     433       (5,073 )
  Class A Shares issued in     
                                             
 connection with share
                                             
 based compensation     289      -     310      -     -     -       310   
  Share based compensation
    -     -     3,920     -     -     -       3,920  
  Foreign currency translation
    -     -     -     -     2,803     -       2,803  
  Unrealized gain on investment,
                                             
     net of tax         -     -     -     -     7,733      -       7,733   
Balance at June 30, 2009
    59,788   $ 60   $ 501,324   $ 414,187   $ 10,124   $ 44,464     $ 970,159  
                                               





The accompanying notes are an integral part of these consolidated financial statements.
 
5

 
First Advantage Corporation

Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2009 and 2008 (Unaudited)
 
   
(in thousands)
 
For the Six Months Ended
 
   
June 30,
 
   
2009
   
2008
 
Cash flows from operating activities:
           
    Net income
  $ 23,418     $ 25,352  
    Loss from discontinued operations
    -       (4,241 )
    Income from continuing operations
  $ 23,418     $ 29,593  
                 
    Adjustments to reconcile income from continuing operations to net
               
        cash provided by (used in) operating activities:
               
       Depreciation and amortization
    21,581       20,919  
       Bad debt expense
    6,483       3,464  
       Share based compensation
    3,920       4,974  
       Deferred income tax
    1,324       7,676  
       Change in operating assets and liabilities, net of acquisitions:
               
       Accounts receivable
    (3,826 )     13,603  
       Prepaid expenses and other current assets
    (547 )     (535 )
       Other assets
    126       (116 )
       Accounts payable
    (1,117 )     (2,322 )
       Accrued liabilities
    1,905       (1,962 )
       Deferred income
    (604 )     (477 )
       Due from affiliates
    (3,622 )     (6,782 )
       Income tax accounts
    (1,475 )     (59,400 )
       Accrued compensation and other liabilities
    (10,390 )     (11,157 )
          Net cash provided by (used in) operating activities - continuing operations
    37,176       (2,522 )
          Net cash provided by operating activities - discontinued operations
    -       754  
Cash flows from investing activities:
               
    Database development costs
    (1,939 )     (2,092 )
    Purchases of property and equipment
    (9,826 )     (17,479 )
    Cash paid for acquisitions
    (19,465 )     (51,152 )
    Proceeds from sale of assets
    850       -  
    Cash balance of companies acquired
    -       331  
          Net cash used in investing activities - continuing operations
    (30,380 )     (70,392 )
          Net cash provided by investing activities - discontinued operations
    -       1,721  
Cash flows from financing activities:
               
    Proceeds from long-term debt
    50,396       90,000  
    Repayment of long-term debt
    (45,139 )     (52,033 )
    Cash contributions from First American to LeadClick Holdings, LLC
    -       2,402  
    Proceeds from class A shares issued in connection with stock option
               
       plan and employee stock purchase plan
    310       4,365  
    Cash paid for acquisition of noncontrolling interests
    (5,073 )     (8,008 )
    Distribution to noncontrolling interests
    -       (949 )
    Tax expense related to stock options
    -       (204 )
          Net cash provided by financing activities
    494       35,573  
                 
Effect of exchange rates on cash
    827       (146 )
Increase (decrease) in cash and cash equivalents
    8,117       (35,012 )
Cash and cash equivalents at beginning of period
    52,361       76,060  
Change in cash and cash equivalents of discontinued operations
    -       540  
Cash and cash equivalents at end of period
  $ 60,478     $ 41,588  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
6

 
First Advantage Corporation

Consolidated Statements of Cash Flows, continued
For the Six Months Ended June 30, 2009 and 2008 (Unaudited)


   
For the Six Months Ended
 
(in thousands)
 
June 30,
 
   
2009
   
2008
 
Supplemental disclosures of cash flow information:
           
    Cash paid for interest
  $ 432     $ 1,467  
    Cash received for income tax refund
  $ 982     $ 987  
    Cash paid for income taxes
  $ 17,580     $ 69,125  
                 
Non-cash investing and financing activities:
               
    Notes issued in connection with acquisitions
  $ -     $ 3,026  
    Class A shares issued for compensation
  $ 4,997     $ 2,767  
    Unrealized gain (loss) on investment, net of tax
  $ 7,733     $ (29,719 )

The accompanying notes are an integral part of these consolidated financial statements.
7

First Advantage Corporation

Notes to Consolidated Financial Statements

 
1. Organization and Nature of Business
 
First Advantage Corporation (the “Company” or “First Advantage”) is a global risk mitigation and business solutions provider and operates in five primary business segments: Credit Services, Data Services, Employer Services, Multifamily Services, and Investigative and Litigation Support Services.  In the first quarter of 2009, the Company consolidated the previous Lender Services and Dealer Services segments and moved the consumer credit business from the Data Services segment to create the Credit Services segment. The prior periods have been recast to reflect the changed segments.

The First American Corporation and affiliates (“First American”) own approximately 80% of the shares of capital stock of the Company as of June 30, 2009.  The Class B common stock owned by First American is entitled to ten votes per share on all matters presented to the stockholders for vote.
 
On  June 29, 2009, the Company received an unsolicited proposal from First American to acquire all of the issued and outstanding shares of the Company's common stock not owned by First American at a fixed exchange ratio of 0.5375 of a share of First American's  common stock for each share of the Company's common stock. First American's proposal is subject to confirmatory due diligence, the negotiation of an acceptable definitive acquisition agreement and the receipt of all necessary stockholder and regulatory approvals. First American's proposal is under consideration by the Special Committee of the Board of Directors of the Company, which is comprised of directors who are unaffiliated with First American.

As part of the Company’s streamlining initiative, in the second quarter of 2008, First Advantage sold First Advantage Investigative Services (“FAIS”), which was included in our Investigative and Litigation Support Services segment, and Credit Management Solutions, Inc. (“CMSI”), which was included in our Credit Services segment.  The results of these businesses’ operations in the prior period are presented in discontinued operations in the Company’s Consolidated Statements of Income.


2. Summary of Significant Accounting Policies
 
Basis of Presentation

The consolidated financial information included in this report has been prepared in accordance with the instructions to Form 10-Q and does not include all of the information and notes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments are of a normal, recurring nature and are considered necessary for a fair statement of the results for the interim period.  The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles.  This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission.
 
Certain amounts for the three and six months ended June 30, 2008 and at December 31, 2008 have been reclassified to conform with 2009 presentation.

Operating results for the three and six months ended June 30, 2009 and 2008 are not necessarily indicative of the results that may be expected for the entire fiscal year.
 
Subsequent events have been evaluated through July 30, 2009, the date these financial statements were issued.

As of June 30, 2009, the Company’s significant accounting policies and estimates, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, have not changed from December 31, 2008, except for the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 141 (revised 2007), “Business Combinations,” SFAS No. 160, “Noncontrolling Interest in Consolidated Financial Statements,” SFAS No. 165, "Subsequent Events," and FASB Staff Position FAS 107-1, "Interim Disclosures about Fair Value of Financial Instruments."

Purchase Accounting

In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) retains the fundamental requirements in SFAS No. 141 that the acquisition method of accounting (which SFAS No. 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. In general, the statement 1) broadens the guidance of SFAS No. 141, extending its applicability to all events where one entity obtains control over one or more other businesses, 2) broadens the use of fair value measurements used to recognize the assets acquired and liabilities assumed, 3) changes the accounting for acquisition related fees and restructuring costs incurred in connection with an acquisition, and 4) increases required disclosures. The Company will apply the provisions of this statement prospectively to business combinations for which the acquisition date is on or after January 1, 2009.  
 
 
8

 
 
First Advantage Corporation

Notes to Consolidated Financial Statements
 
 
Noncontrolling Interest

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 requires that a noncontrolling interest in a subsidiary be reported as equity and the amount of consolidated net income specifically attributable to the noncontrolling interest be identified in the consolidated financial statements. It also requires consistency in the manner of reporting changes in the parent’s ownership interest and requires fair value measurement of any noncontrolling equity investment retained in a deconsolidation. The Company has applied the provisions of this statement effective beginning on January 1, 2009 and the adoption did not have a material effect on its consolidated financial statements.


Fair Value of Financial Instruments
 
In April 2009, the FASB issued FASB Staff Position (“FSP”) FSP SFAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.” This FSP amends Statement of Financial Accounting Standard (“SFAS”) No. 107, “Disclosures About Fair Value of Financial Instruments,” to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in summarized financial information at interim reporting periods. This FSP is effective for interim reporting periods ending after June 15, 2009. The FSP does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, this FSP requires comparative disclosures only for periods ending after initial adoption. We adopted this new standard effective April 1, 2009.
 
The carrying amount of the Company’s financial instruments at June 30, 2009 and December 31, 2008, which includes cash and cash equivalents, marketable equity securities and accounts receivable, approximates fair value because of the short maturity of those instruments.  The Company’s marketable equity securities are classified as available for sale securities.  Unrealized holding gains and losses for available for sale securities are excluded from earnings and reported, net of taxes, as accumulated other comprehensive (loss) income.  The Company considers its variable rate debt to be representative of current market rates and, accordingly, estimates that the recorded amounts approximate fair market value.  Fair value estimates of its fixed rate debt were determined using discounted cash flow methods with a discount rate of 3.25% and 3.25%, which are the estimated rates that similar instruments could be negotiated at June 30, 2009 and December 31, 2008, respectively.
 
The estimated fair values of the Company’s financial instruments, none of which are held for trading purposes, are summarized as follows:
 

   
June 30, 2009
 
December 31, 2008
 
(in thousands)
 
Carrying
 
Estimated
 
Carrying
   
Estimated
 
   
Amount
 
Fair Value
 
Amount
   
Fair Value
 
Cash and cash equivalents
  $ 60,478   $ 60,478   $ 52,361     $ 52,361  
Accounts receivable
    118,702     118,702     121,531       121,531  
Marketable equity securities
    43,389     43,389     30,365       30,365  
Long-term debt and capital leases
    (38,164 )   (38,201 )   (32,829 )     (32,699 )
 
 
Subsequent Events

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”).  SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued.  SFAS 165 is effective for reporting periods ending after June 15, 2009.  
 

 
 
9

 
First Advantage Corporation

Notes to Consolidated Financial Statements
 
3. Acquisitions
 
During the first six months of 2009, the Company paid consideration of approximately $19.5 million in cash related to earnout provisions from prior year acquisitions and approximately $5.1 million for the final purchase of a portion of noncontrolling interests in LeadClick Media, Inc.  The additional consideration related to earnout provisions was recorded to goodwill and the purchase of noncontrolling interests was recorded to additional paid in capital when paid.

The changes in the carrying amount of goodwill, by operating segment, are as follows for the six months ended June 30, 2009:


     
Acquisitions,
         
 
Balance at
 
(Disposals)
 
Adjustments to net
 
Balance at
 
(in thousands)
December 31, 2008
 
and Earnouts
 
assets acquired
 
June 30, 2009
 
Credit Services
$ 107,578   $ -   $ -   $ 107,578  
Data Services
  218,505     (611 )   -     217,894  
Employer Services
  272,461     2,266     2,245     276,972  
Multifamily Services
  49,174     -     -     49,174  
Investigative and Litigation Support Services
  83,651     17,199     23     100,873  
Consolidated
$ 731,369   $ 18,854   $ 2,268   $ 752,491  


The adjustments to net assets acquired represent post acquisition adjustments for those companies acquired in the past periods.

4. Discontinued Operations
 
As discussed in Note 1, as part of the Company’s streamlining initiative, in the second quarter of 2008, the Company sold FAIS, which was included in our Investigative and Litigation Support Services segment, and CMSI, which was included in our Credit Services segment.  The results of these businesses’ operations in the prior period are presented in discontinued operations in the Company’s Consolidated Statements of Income.

 
10 

 
First Advantage Corporation

Notes to Consolidated Financial Statements
 
 
The following amounts have been segregated from continuing operations and are reflected as discontinued operations for the three and six months ended June 30, 2008.


   
Three months ended
   
Six months ended
 
   
June 30,
   
June 30,
 
(in thousands, except per share amounts)
 
2008
   
2008
 
             
Total revenue
  $ 2,826     $ 7,671  
Loss from discontinued operations before income taxes
  $ (2,141 )   $ (3,245 )
Loss on sale of discontinued operations before income taxes
    -       (3,910 )
Income tax benefit
    (877 )     (2,914 )
Loss from discontinued operations, net of tax
  $ (1,264 )   $ (4,241 )
Loss per share:
               
Basic
  $ (0.02 )   $ (0.07 )
Diluted
  $ (0.02 )   $ (0.07 )
Weighted-average common shares outstanding:
               
Basic
    59,435       59,297  
Diluted
    59,617       59,374  



5. Goodwill and Intangible Assets
 
In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” the Company will perform the goodwill impairment test for all reporting units in the fourth quarter of 2009.   There have been no impairments of goodwill during the six months ended June 30, 2009.

Given the current economic environment and the uncertainties regarding the impact on the Company’s business, there can be no assurance that the Company’s estimates and assumptions regarding the duration of the ongoing economic downturn, or the period or strength of recovery, made for purposes of the Company’s goodwill impairment testing during the year ended December 31, 2008 will prove to be accurate predictions of the future. If the Company’s assumptions regarding forecasted revenue or margin growth rates of certain reporting units are not achieved, the Company may be required to record additional goodwill impairment losses in future periods, whether in connection with the Company’s next annual impairment testing in the fourth quarter of 2009 or prior to that, if any such change constitutes a triggering event in other than the quarter in which the annual goodwill impairment test is performed. It is not possible at this time to determine if any such future impairment loss would result or, if it does, whether such charge would be material.

 
11

 
First Advantage Corporation

Notes to Consolidated Financial Statements>
 
 
 
Goodwill and other identifiable intangible assets as of June 30, 2009 and December 31, 2008 are as follows:

(in thousands)
 
June 30, 2009
   
December 31, 2008
 
             
Goodwill
  $ 752,491     $ 731,369  
Customer lists
  $ 95,556     $ 95,446  
Less accumulated amortization
    (47,049 )     (41,633 )
Customer lists, net
  $ 48,507     $ 53,813  
Other identifiable intangible assets:
               
   Noncompete agreements
  $ 10,186     $ 11,783  
   Trade names
    21,664       21,631  
      31,850       33,414  
Less accumulated amortization
    (16,539 )     (16,169 )
Other identifiable intangible assets, net
  $ 15,311     $ 17,245  


Amortization of customer lists and other identifiable intangible assets totaled approximately $3.7 million and $4.4 million for the three months ended June 30, 2009 and 2008, respectively, and approximately $7.3 million and $8.5 million for the six months ended June 30, 2009 and 2008, respectively.

Estimated amortization expense relating to intangible asset balances as of June 30, 2009, is expected to be as follows over the next five years:

 
     
(in thousands)
     
Remainder of 2009
  $ 7,252  
2010
    13,926  
2011
    11,307  
2012
    10,213  
2013
    8,812  
Thereafter
    12,308  
    $ 63,818  


The changes in the carrying amount of identifiable intangible assets are as follows for the six months ended June 30, 2009:

   
Other
       
   
Identifiable
       
   
Intangible
   
Customer
 
(in thousands)
 
Assets
   
Lists
 
             
Balance, at December 31, 2008
  $ 17,245     $ 53,813  
Adjustments
    33       58  
Amortization
    (1,967 )     (5,364 )
Balance, at June 30, 2009
  $ 15,311     $ 48,507  
 
 
12

 
 
First Advantage Corporation

Notes to Consolidated Financial Statements

6. Debt
 
Long-term debt consists of the following at June 30, 2009:
 

(in thousands, except percentages)
     
       
Acquisition notes:
     
    Weighted average interest rate of 3.65% with maturities
     
    through 2011
  $ 11,699  
Bank notes:
       
    $225 million Secured Credit Facility, interest at 30-day LIBOR
       
    plus 1.13% (1.44% at June 30, 2009) matures September 2010
    25,000  
Capital leases and other debt:
       
    Various interest rates with maturities through 2011
    1,465  
Total long-term debt and capital leases
  $ 38,164  
Less current portion of long-term debt and capital leases
    8,807  
Long-term debt and capital leases, net of current portion
  $ 29,357  
         

At June 30, 2009, the Company was in compliance with the financial covenants of its loan agreement.
 
 
 
13

 
 
First Advantage Corporation

Notes to Consolidated Financial Statements
 
 
A reconciliation of earnings per share and weighted-average shares outstanding is as follows:

 
Three Months Ended
 
Six Months Ended
 
(in thousands, except per share amounts)
June 30,
 
June 30,
 
 
2009
 
2008
 
2009
 
2008
 
Income from continuing operations attributable to FADV shareholders
$ 12,971   $ 13,652   $ 23,585   $ 29,918  
Loss from discontinued operations attributable to FADV shareholders, net of tax
  -     (1,264 )   -     (4,241 )
Net income attributable to FADV shareholders
$ 12,971   $ 12,388   $ 23,585   $ 25,677  
Denominator:
                       
    Weighted-average shares for basic earnings per share
  59,776     59,435     59,681     59,297  
    Effect of restricted stock
  117     75     79     47  
    Effect of dilutive securities - employee stock options and warrants
  5     107     4     30  
Denominator for diluted earnings per share
  59,898     59,617     59,764     59,374  
Earnings per share:
                       
    Basic
                       
       Income from continuing operations attributable to FADV shareholders
$ 0.22   $ 0.23   $ 0.40   $ 0.50  
       Loss from discontinued operations attributable to FADV shareholders, net of tax
  -     (0.02 )   -     (0.07 )
       Net income attributable to FADV shareholders
$ 0.22   $ 0.21   $ 0.40   $ 0.43  
     Diluted
                       
       Income from continuing operations attributable to FADV shareholders
$ 0.22   $ 0.23   $ 0.39   $ 0.50  
       Loss from discontinued operations attributable to FADV shareholders, net of tax
  -     (0.02 )   -     (0.07 )
       Net income attributable to FADV shareholders
$ 0.22   $ 0.21   $ 0.39   $ 0.43  


For the three months ended June 30, 2009 and 2008, options and warrants totaling 3,376,872 and 3,062,601, respectively, were excluded from the weighted average diluted shares outstanding, as they were antidilutive.  For the six months ended June 30, 2009 and 2008, options and warrants totaling 3,376,872 and 3,599,011, respectively, were excluded from the weighted average diluted shares outstanding, as they were antidilutive.


8. Share-Based Compensation
 
In the first quarter of 2008, the Company changed from granting stock options as the primary means of share-based compensation to granting restricted stock units (“RSU”). The fair value of any RSU grant is based on the market value of the Company’s shares on the date of the grant and is recognized as compensation expense over the vesting period.  RSUs generally vest over three years at a rate of 33.3% for the first two years and 33.4% for last year.
 
14

 
First Advantage Corporation

Notes to Consolidated Financial Statements>

Restricted stock activity since December 31, 2008 is summarized as follows:
 
         
Weighted
 
(in thousands, except exercise prices)
       
Average
 
   
Number of
   
Grant-Date
 
   
Shares
   
Fair Value
 
Nonvested restricted stock outstanding at December 31, 2008
    632     $ 21.93  
Restricted stock granted
    406     $ 10.61  
Restricted stock forfeited
    (30 )   $ 17.99  
Restricted stock vested
    (253 )   $ 23.06  
Nonvested restricted stock outstanding at June 30, 2009
    755     $ 15.61  
 
The following table illustrates the share-based compensation expense recognized for the three and six months ended June 30, 2009 and 2008.

   
Three Months Ended
 
Six Months Ended
 
   
June 30,
 
June 30,
 
(in thousands)
 
2009
 
2008
 
2009
 
2008
 
Stock options
  $ 487   $ 1,326   $ 1,120   $ 2,700  
Restricted stock
    1,459     1,349     2,746     2,188  
Employee stock purchase plan
    24     42     54     86  
    $ 1,970   $        2,717   $ 3,920   $ 4,974  

Stock option activity under the Company’s stock plan since December 31, 2008 is summarized as follows:

         
Weighted
   
Aggregate
 
(in thousands, except exercise prices)
 
Number of
   
Average
   
Intrinsic
 
   
Shares
   
Exercise Price
   
Value
 
Options outstanding at December 31, 2008
    3,492     $ 23.06     $ 71  
Options forfeited
    (106 )   $ 28.31          
Options outstanding at June 30, 2009
    3,386     $ 22.93     $ 68  
Options exercisable, end of the quarter
    3,137     $ 22.81     $ 68  

The following table summarizes information about stock options outstanding at June 30, 2009:
 
                                 
(in thousands, except for exercise prices, years and weighted average amounts)
             
                                 
     
Options Outstanding
         
Options Exercisable
 
           
Weighted Avg
   
 
         
Weighted
 
 Range of          
Remaining Contractual
   
Weighted Average
         
Average
 
Exercise Prices
   
Shares
   
Life in Years
   
Exercise Price
   
Shares
   
Exercise Price
 
$ 7.00 - $ 12.50       9       2.2     $ 11.13       9     $ 11.13  
$ 12.51 - $ 25.00       2,254       4.6     $ 20.85       2,167     $ 20.89  
$ 25.01 - $ 50.00       1,118       6.2     $ 27.04       956     $ 27.09  
$ 50.01 - $242.25       5       1.7     $ 60.50       5     $ 60.50  
          3,386                       3,137          

The Company had outstanding warrants to purchase up to 41,462 shares of its common stock at exercise prices of $12.05 per share as of June 30, 2009.  The weighted average remaining contractual life in years for the warrants outstanding is 1.93.

 
15

 
 
First Advantage Corporation

Notes to Consolidated Financial Statements
 
9. Income Taxes
 
The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and foreign jurisdictions.  With few exceptions, the Company is no longer subject to U.S. federal examinations by tax authorities for years before 2005, and state and local, and non-U.S. income tax examinations by tax authorities before 2003.  In April 2009, the Internal Revenue Service (“IRS”) concluded an examination of First Advantage’s consolidated 2005 federal income tax return without any material adjustments. In March 2009, the IRS initiated an examination of First Advantage’s consolidated 2006 and 2007 federal income tax returns, which the Company does not anticipate will result in material adjustments.
 
As of June 30, 2009, the Company has a $4.9 million total liability recorded for unrecognized tax benefits as well as a $0.4 million total liability for income tax related interest.  The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $2.6 million.  The majority of the unrecognized tax benefits that would affect the effective tax rate and associated interest relates to foreign operations.  The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.  The Company does not currently anticipate that the total amount of unrecognized tax benefits will significantly increase or decrease by the end of 2009.

10.  Segment Information
 
The Company operates in five primary business segments: Credit Services, Data Services, Employer Services, Multifamily Services, and Investigative and Litigation Support Services. In the first quarter of 2009, the Company consolidated the previous Lender Services and Dealer Services segments and moved the consumer credit business from the Data Services segment to create the Credit Services segment. The prior periods have been recast to reflect the changed segments.

The Credit Services segment include business lines that offer lenders credit reporting solutions for mortgage and home equity needs, that provide consumer credit reporting services and serve the automotive dealer marketplace by delivering consolidated consumer credit reports and automotive lead generation services.

The Data Services segment includes business lines that provide transportation credit reporting, motor vehicle record reporting, fleet management, criminal records reselling, specialty finance credit reporting, and lead generation services.  Revenue for the Data Services segment includes $1.0 million and $1.4 million of inter-segment sales for the three months ended June 30, 2009 and 2008, respectively, and $1.9 million and $2.8 million of inter-segment sales for the six months ended June 30, 2009 and 2008, respectively.

The Employer Services segment includes employment background screening, occupational health services, tax incentive services and hiring solutions.  Products and services relating to employment background screening include criminal records searches, employment and education verification, social security number verification and credit reporting.  Occupational health services include drug-free workplace programs, physical examinations and employee assistance programs.  Hiring solutions include applicant tracking software, recruiting services and outsourced management of payroll and human resource functions.  Tax incentive services include services related to the administration of employment-based and location-based tax credit and incentive programs, sales and use tax programs and fleet asset management programs.  Revenue for the Employer Services segment includes $0.1 million of inter-segment sales for the three months ended June 30, 2008, and $0.2 million and $0.5 million of inter-segment sales for the six months ended June 30, 2009 and 2008, respectively.

The Multifamily Services segment includes resident screening and software services.  Resident screening services include criminal background and eviction searches, credit reporting, employment verification and lease performance and payment histories.  Revenue for the Multifamily Services segment includes $0.2 million of inter-segment sales for each of the three months ended June 30, 2009 and 2008, and $0.3 million and $0.4 million of inter-segment sales for the six months ended June 30, 2009 and 2008, respectively.

The Investigative and Litigation Support Services segment includes all investigative services.  Products and services offered by the Investigative and Litigation Support Services segment includes computer forensics, electronic discovery, due diligence reports and other high level investigations.

The elimination of intra-segment revenue and cost of service revenue is included in Corporate.  These transactions are recorded at cost.

Service revenue for international operations included in the Employer Services segment was $7.0 million and $12.3 million for the three months ended June 30, 2009 and 2008, respectively, and $13.5 million and $23.4 million for the six months ended June 30, 2009 and 2008, respectively. Service revenue for international operations included in the Investigative and Litigation Support Services segment was $1.4 million and $11.7 million for the three months ended June 30, 2009 and 2008, respectively, and $6.8 million and $24.6 million for the six months ended June 30, 2009 and 2008, respectively.
 
16

 
First Advantage Corporation

Notes to Consolidated Financial Statements>
 
 

The following table sets forth segment information for the three and six months ended June 30, 2009 and 2008.


                         
(in thousands)
 
 
   
Depreciation
     
Income (Loss)
 
Three Months Ended June 30, 2009
 
 Service Revenue
   
and Amortization
   
From Operations
   
Assets
 
Credit Services
  $ 67,705     $ 1,488     $ 17,584     $ 200,797  
Data Services
    28,842       2,427       2,153       300,290  
Employer Services
    40,168       3,772       2,681       391,370  
Multifamily Services
    19,685       1,509       7,579       85,018  
Investigative and Litigation Support Services
    8,694       727       270       120,482  
Corporate and Eliminations
    (426 )     972       (8,347 )     64,782  
Consolidated
  $ 164,668     $ 10,895     $ 21,920     $ 1,162,739  
 
Three Months Ended June 30, 2008
 
 
 
                         
Credit Services
  $ 66,984     $ 1,565     $ 11,961     $ 190,311  
Data Services
    19,533       2,534       3,764       313,651  
Employer Services
    55,511       3,295       3,004       410,989  
Multifamily Services
    19,986       1,429       6,569       89,342  
Investigative and Litigation Support Services
    21,178       858       7,535       115,539  
Corporate and Eliminations
    (769 )     1,045       (8,840 )     64,152  
Consolidated
  $ 182,423     $ 10,726     $ 23,993     $ 1,183,984  
Six Months Ended June 30, 2009
                               
Credit Services
  $ 132,124     $ 2,937     $ 32,331     $ 200,797  
Data Services
    87,942       4,932       7,799       300,290  
Employer Services
    77,619       7,287       2,181       391,370  
Multifamily Services
    37,588       3,011       13,253       85,018  
Investigative and Litigation Support Services
    20,420       1,452       1,416       120,482  
Corporate and Eliminations
    (985 )     1,962       (16,219 )     64,782  
Consolidated
  $ 354,708     $ 21,581     $ 40,761     $ 1,162,739  
Six Months Ended June 30, 2008
                               
Credit Services
  $ 141,886     $ 2,752     $ 28,308     $ 190,311  
Data Services
    38,500       5,031       7,534       313,651  
Employer Services
    109,198       6,374       6,475       410,989  
Multifamily Services
    38,335       2,798       11,341       89,342  
Investigative and Litigation Support Services
    44,681       1,623       17,060       115,539  
Corporate and Eliminations
    (1,923 )     2,044       (19,566 )     64,152  
Consolidated
  $ 370,677     $ 20,622     $ 51,152     $ 1,183,984  




 
 
17



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Note of Caution Regarding Forward Looking Statements

Certain statements in this quarterly report on Form 10-Q relate to future results of the Company and are considered “forward-looking statements.”  These statements, which may be expressed in a variety of ways, including the use of future or present tense language, relate to among other things, sufficiency and availability of cash flows and other sources of liquidity, current levels of operations, anticipated growth, future market positions, synergies from integration, ability to execute its growth strategy, levels of capital expenditures and ability to satisfy current debt.  These forward-looking statements, and others forward-looking statements contained in other public disclosures of the Company are based on assumptions that involve risks and uncertainties, and that are subject to change based on various important factors (some of which are beyond the Company’s control).  Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements.  Factors that could cause the anticipated results to differ from those described in the forward-looking statements include: general volatility of the capital markets and the market price of the Company’s Class A common stock; the Company’s ability to successfully raise capital; the Company’s ability to identify and complete acquisitions and to successfully integrate businesses it acquires; changes in applicable government regulations; the degree and nature of the Company’s competition; increases in the Company’s expenses; continued consolidation among the Company’s competitors and customers; unanticipated technological changes and requirements; the Company’s ability to identify suppliers of quality and cost-effective data; and other factors described in this quarterly report on Form 10-Q.   In addition to the risk factors set forth above and in this quarterly report on Form 10-Q, you should carefully consider the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as well as the other information contained the Company’s Annual Report, as updated or modified in subsequent filings.  The Company faces risks other than those listed in the Annual Report, as updated, including those that are unknown and others of which the Company may be aware but, at present, considers immaterial.  Actual results may differ materially from those expressed or implied as a result of these risks and uncertainties. The forward-looking statements speak only as of the date they are made.  The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
 


MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

 
Overview

First Advantage Corporation (Nasdaq: FADV) (“First Advantage” or the “Company”) provides global risk mitigation, screening services and credit reporting to enterprise and consumer customers.  The Company operates in five primary business segments: Credit Services, Data Services, Employer Services, Multifamily Services, and Investigative & Litigation Support Services.  In the first quarter of 2009, the Company consolidated the previous Lender Services and Dealer Services segments and moved the consumer credit business from the Data Services segment to create the Credit Services segment. The prior periods have been recast to reflect the changed segments.  First Advantage is headquartered in Poway, California and has approximately 3,700 employees in offices throughout the United States and abroad.

The current economic downturn has caused decreased service revenue in the Credit Services segment related to the mortgage and auto industries and the Data Services segment related to the transportation and specialty finance businesses.  Management expects continued weakness in the real estate and mortgage markets to continue impacting the Company’s Credit Services segment and the transportation and specialty credit businesses in the Data Services segment.  In addition, the effect of the issues in the real estate and related credit markets together with the other macroeconomic matters has resulted in higher unemployment rates negatively impacting the volumes in the Employer Services segment.  Given this outlook, management is focusing on expense reductions, operating efficiencies, and increasing market share throughout the Company.

Given the current economic environment and the uncertainties regarding the impact on the Company’s business, there can be no assurance that the Company’s estimates and assumptions regarding the duration of the ongoing economic downturn, or the period or strength of recovery, made for purposes of the Company’s goodwill impairment testing during the year ended December 31, 2008 will prove to be accurate predictions of the future. If the Company’s assumptions regarding forecasted revenue or margin growth rates of certain reporting units are not achieved, the Company may be required to record additional goodwill impairment losses in future periods, whether in connection with the Company’s next annual impairment testing in the fourth quarter of 2009 or prior to that, if any such change constitutes a triggering event in other than the quarter in which the annual goodwill impairment test is performed. It is not possible at this time to determine if any such future impairment loss would result or, if it does, whether such charge would be material.

Operating results for the three months ended June 30, 2009 included total service revenue of $164.7 million, this represents a decrease of 9.7% over the same period in 2008.  Operating results for the six months ended June 30, 2009 included total service revenue of $354.7 million, this represents a decrease of 4.3% over the same period in 2008.  Operating income for the three and six months ended June 30, 2009 was $21.9 million and $40.8 million, respectively.  Operating income decreased $2.1 million for the three months ended June 30, 2009 in comparison to the same period in 2008.  Operating income decreased $10.4 million for the six months ended June 30, 2009 in comparison to the same period in 2008.

On  June 29, 2009, the Company received an unsolicited proposal from First American to acquire all of the issued and outstanding shares of the Company's common stock not owned by First American at a fixed exchange ratio of 0.5375 of a share of First American's  common stock for each share of the Company's common stock. First American's proposal is subject to confirmatory due diligence, the negotiation of an acceptable definitive acquisition agreement and the receipt of all necessary stockholder and regulatory approvals. First American's proposal is under consideration by the Special Committee of the Board of Directors of the Company, which is comprised of directors who are unaffiliated with First American.
 
As part of the Company’s streamlining initiative, in the second quarter of 2008, First Advantage sold First Advantage Investigative Services (“FAIS”), which was included in our Investigative and Litigation Support Services segment, and Credit Management Solutions, Inc. (“CMSI”), which was included in our Credit Services segment.  The results of these businesses’ operations in the prior period are presented in discontinued operations in the Company’s Consolidated Statements of Income.

The following is a summary of the operating results by the Company’s business segments for the three and six months ended June 30, 2009 and June 30, 2008.
 

(in thousands, except percentages)
                             
 
 
 
 
 
 
 
 
 
Invest/Litigation
 
Corporate
       
Three Months Ended June 30, 2009
 Credit Services
 
Data Services
 
Employer Services
 
Multifamily Services
 
Support Services
 
and Eliminations
   
Total
 
Service revenue
$ 67,705   $ 28,842   $ 40,168   $ 19,685   $ 8,694   $ (426 )   $ 164,668  
Reimbursed government fee revenue
  391     11,570     2,243     -     -     (863 )     13,341  
  Total revenue
  68,096     40,412     42,411     19,685     8,694     (1,289 )     178,009  
Cost of service revenue
  30,544     15,404     10,666     1,751     526     (630 )     58,261  
Government fees paid
  391     11,570     2,243     -     -     (863 )     13,341  
  Total cost of service
  30,935     26,974     12,909     1,751     526     (1,493 )     71,602  
Gross margin
  37,161     13,438     29,502     17,934     8,168     204       106,407  
Salaries and benefits
  12,063     4,367     15,615     5,792     5,050     5,243       48,130  
Facilities and telecommunications
  1,633     659     2,128     730     725     990       6,865  
Other operating expenses
  4,393     3,832     5,306     2,324     1,396     1,346       18,597  
Depreciation and amortization
  1,488     2,427     3,772     1,509     727     972       10,895  
Income (loss) from operations
$ 17,584   $ 2,153   $ 2,681   $ 7,579   $ 270   $ (8,347 )   $ 21,920  
Operating margin percentage
  26.0   7.5   6.7   38.5   3.1  %   N/A       13.3 %
                                             
                 
Invest/Litigation
 
Corporate
         
Three Months Ended June 30, 2008
Credit Services
 
Data Services
 
Employer Services
 
Multifamily Services
 
Support Services
 
and Eliminations
   
Total
 
Service revenue
$ 66,984   $ 19,533   $ 55,511   $ 19,986   $ 21,178   $ (769 )   $ 182,423  
Reimbursed government fee revenue
  -     11,906     2,226     -     -     (1,010 )     13,122  
  Total revenue
  66,984     31,439     57,737     19,986     21,178     (1,779 )     195,545  
Cost of service revenue
  30,392     5,710     16,070     1,759     440     (884 )     53,487  
Government fees paid
  -     11,906     2,226     -     -     (1,010 )     13,122  
  Total cost of service
  30,392     17,616     18,296     1,759     440     (1,894 )     66,609  
Gross margin
  36,592     13,823     39,441     18,227     20,738     115       128,936  
Salaries and benefits
  14,916     5,010     20,339     6,386     8,442     7,834       62,927  
Facilities and telecommunications
  2,136     640     2,554     896     713     1,145       8,084  
Other operating expenses
  6,014     1,875     9,952     2,947     3,190     (1,069 )     22,909  
Depreciation and amortization
  1,565     2,534     3,295     1,429     858     1,045       10,726  
Impairment loss
  -     -     297                   297  
Income (loss) from operations
$ 11,961   $ 3,764   $ 3,004   $ 6,569   $ 7,535   $ (8,840 )   $ 23,993  
Operating margin percentage
  17.9   19.3   5.4   32.9   35.6  %   N/A       13.2 %

 
20

 
                 
Invest/Litigation
 
Corporate
       
Six Months Ended June 30, 2009
Credit Services
 
Data Services
 
Employer Services