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FINANCIAL RESULTS
This segment realized a 10 percent increase in its operating revenues in 2002 over its 2001 total,
ending the year at $215.3 million. Aided by increased efficiencies, operational streamlining,
technology implementation, and expense controls, income before income taxes and minority
interests rose 31 percent to nearly $39.3 million.
SEGMENT ACTIVITY
The Credit Information segment produces nearly 4.5 million credit reports per month, including
nearly 3 million reports for markets outside of real estate-related industries.
First American CREDCO remains the number-one firm in the merged credit reporting industry, supplying one of every three
credit reports provided to the nation's mortgage lenders. In 2002, this company entered new areas of "solution selling,"
which create added value by providing products that directly solve the unique problems of individual customers.
This segment is also the premier provider of specialized credit products to the automotive retailing community, processing
more than 13.8 million credit reports for this industry in 2002. With more than 55 million new and used vehicles sold each
year, the automotive financing industry is a significant component of First American's growth strategy. The group's goal is to
be involved in every transaction that flows through the finance and insurance offices of automobile retailers across the nation.
First American Credit Management Solutions, Inc. (CMSI) is addressing technology advancements with new automotive
loan origination solutions, allowing further market reach into the smaller, more regionalized lending community.
In March of 2003, the Company announced the merger of Credit Online, Inc., a subsidiary of First American CMSI, with
DealerTrack, Inc., a technology services company that enables automobile finance transactions through its DealerTrack™
platform. The merger brings together more than 19,000 automobile dealers with over 40 key automotive financing lenders
through state-of-the-art technology. This, combined with integration solutions from the leading
dealer management system providers, Automatic Data Processing, Inc. and The Reynolds and
Reynolds Company, will automate and accelerate the entire dealer-to-lender relationship. First
American will retain a significant interest in DealerTrack and will provide credit bureau products and
services to the combined network.
In June 2002, First American and Experian Automotive announced a new joint venture, creating
Vehicle Title, LLC, the exclusive provider of TitleGuard Vehicle Title Insurance. TitleGuard insures
used-car buyers, sellers, and lenders against financial losses that can result from unreported
Department of Motor Vehicle title defects. TitleGuard's market potential is vast, given that more
than 40 million used vehicles change ownership every year.
First American Membership Services provides credit reports, credit monitoring, and other personal identity protection tools
directly to consumers. In 2002, the group contracted with one of the nation's top five banks, a relationship that will secure at
least 200,000 memberships in the first year.
TeleTrack, Inc., which boasts the nation's largest subprime credit database, provides consumer information for risk analysis
to the pay-day loan, rent-to-own, cable, and people locator industries. In 2002, TeleTrack began serving the subprime
mortgage, credit card, automotive, and insurance industries, as well.
MARKET GROWTH
In 2002, just under half of this segment's credit revenues were generated from automotive, consumer, subprime lender,
and other markets, helping to lessen the Corporation's dependency on the real estate industry. This segment also launched
offshore outsourcing operations in 2002, with expectations of reducing software development and operating expenses.
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