ChoicePoint Earning's Lower on Divestiture Charges

For the third quarter of 2006, ChoicePoint Inc. reported total revenue from continuing operations of $246.7 million, representing growth of 4 percent, compared to $237.0 million for the third quarter of 2005.

Diluted earnings per share from continuing operations ("EPS") for the third quarter was $0.11, which included the following: $25.7 million ($0.31 per share), net of taxes, of asset impairment and related charges associated primarily with the planned disposal of additional non-strategic businesses incremental to the businesses already classified as discontinued operations, $3.1 million ($0.04 per share), net of taxes, of stock option expense under Financial Accounting Standards Board Statement No. 123 (revised 2004), Share Based Payment ("FAS 123®"), and $0.5 million ($0.01 per share), net of taxes, for specific expenses related to the previously disclosed fraudulent data access. Excluding these charges, EPS would have been $0.46, a 4 percent increase over EPS excluding other operating charges for the comparable period of 2005.

As part of its strategic review, in the quarter ended September 30, 2006 the Company recorded the charge described above of $25.7 million ($0.31 per share), net of taxes, primarily related to the proposed sale of additional smaller non-strategic businesses. While the Company has not yet met the criteria for classifying these businesses as discontinued operations under GAAP, current intentions and the receipt of indicative bids for these businesses require the recording of this charge in continuing operations at this time.

As disclosed in the Company’s press release of July 10, 2006, ChoicePoint announced plans to divest its Precision Marketing, Bode Technology Group and EquiSearch businesses as a result of its company-wide strategic review. During the third quarter of 2006, the Company recorded a non-cash charge of $132.9 million ($81.6 million after tax benefit) in discontinued operations to reduce the carrying value of goodwill and other assets related to these businesses in order to reflect the estimated net proceeds to be realized from selling these three businesses based on indicative bids received to date. This charge also includes $3.1 million net of taxes from the previously announced sale of Priority Data.

Since announcing the decision on July 10, 2006 to divest these businesses, expressions of interest and specific preliminary offers to purchase have been received by the Company. While transactions have not yet been consummated and the Company has no definitive agreements to sell these businesses, GAAP requires recognition of the estimated impairment at this time.

While these dispositions are not yet finalized and actual results may vary from these estimates, the charges recorded during this quarter reflect the completion of the current strategic review by the Company. After combining the results of continuing and discontinued operations, the Company incurred a net loss of $72.2 million ($0.86 per share) for the third quarter of 2006.

Based on recent business and economic trends, ChoicePoint expects 2006 full year internal revenue growth from continuing operations to be in the range of 4 to 6 percent, with improving trends in the last quarter of 2006. Including the impact of acquisitions, total revenue growth is expected to be in the range of 5 to 7 percent for the full year 2006. Additionally, the Company expects operating profit margins from continuing operations to be approximately 26 to 27 percent for the full-year, excluding the impact discussed below of stock option expense, on-going legal expenses related to the previously disclosed fraudulent data access, and operating charges related to the Company’s centralization of functions and consolidation of certain technology platforms. Operating margins from continuing operations including these expenses are projected to be approximately 23 to 24 percent for the full year.

The Company recorded a pre-tax charge, associated with continuing operations, in the third quarter of $3.9 million ($3.1 million net of taxes) of stock option expense, for a year-to-date total of $10.3 million ($7.9 million net of taxes), as a result of adoption of FAS 123® as of January 1, 2006. The Company expects full-year 2006 income from continuing operations, net of taxes, to be impacted by between $11 million and $12 million of stock option expense.

The Company incurred legal expenses and other professional fees related to the previously disclosed fraudulent data access of $0.9 million during the third quarter of 2006. The Company continues to estimate a total pretax expense of between $3 and $4 million for the full year 2006, exclusive of any potential settlements.

Other operating charges associated with centralizing functions and consolidating certain technology platforms were $1.4 million ($0.7 million net of taxes) in the third quarter of 2006, for a year-to-date total of $13.9 million ($8.5 million net of taxes). A total pretax expense of between $14 and $15 million is expected for the full year of 2006.