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THE STRENGTH BEHIND YOUR DECISIONS Stephens Information Technology & Services Conference June 9, 2005
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Safe Harbor Statement Certain statements made in this presentation, including those related to accretion to First Advantage, the market capitalization of First Advantage, revenue and earnings growth of First Advantage, the closing of the transaction, expansion into new markets, ability to pursue larger acquisitions, and ability to execute growth strategy are forward looking. 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: interest rate fluctuations; changes in the performance of the real estate markets; limitations on access to public records and other data; general volatility in the capital markets; changes in applicable government regulations; consolidation among both companies’ significant customers and competitors; the companies’ continued abilities to identify and complete acquisitions and successfully integrate acquired businesses; the market price of First Advantage’s Class A common stock; First Advantage’s ability to successfully raise capital; increases in First Advantage’s expenses; unanticipated technological changes and requirements; First Advantage’s ability to identify suppliers of quality and cost-effective data, and other factors described in both companies’ Annual Reports on Form 10-K for the year ended December 31, 2004, as filed with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made. Neither First American nor First Advantage undertakes to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. 2
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Business Overview Reporting Segments Marketplace Fundamentals Growth Acceleration Initiatives Strategic Positioning Financial Performance Summary Agenda 3
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Business Overview A leading provider of risk mitigation and business process solutions Formed via reverse merger and publicly listed in June 2003 (NASDAQ: FADV) 67% owned by The First American Corporation (NYSE: FAF) As of March 31, 2005 TSO: 23.8 million shares -Class A Common (tradable): 7.8 million shares -Class B Common (non-tradable; owned by FAF): 16 million shares Ranked among top three in major business lines Offices across the United States and abroad; corporate headquarters in St. Petersburg, Florida Approximately 2,300 employees Serve 45,000+ clients in a variety of markets 4
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Reporting Segments Employment Screening Tax Credits & Incentives Resident Screening #3 Verifications Provider – 4.5M / year #2 Drug Testing Provider – 2M / year 10,000+ Clients; 240 of the Fortune 1000 #2 Provider; 3M Employment Credit Screens/Year Location-Based & Sales and Use Incentives 1,000 Clients Nationwide #1 Provider; 5M Apartment Units Served Proprietary Evictions and National Criminal Databases (Wholesale Services) Sell Property-Management Software and Renters’ Insurance Enterprise Screening 5
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Reporting Segments Risk Mitigation Transportation Services Investigative Services #2 Provider; 13M MVRs Reported/Year 7,500+ Clients Top 5 Provider of Transportation Credit Services; 3,700 Clients #2 Provider; 20 of the Nation’s Top Law Firms Served; 500+ Clients Nationwide Services Include Computer Forensics, Electronic Discovery, Corporate Investigations, Due Diligence and Surveillance to Detect Insurance Fraud Involving Workmen’s Comp., Disability and Liability Cases 6
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Reporting Segments Consumer Direct Consumer Services Leading Web Directory; US SEARCH.com 4M Unique Visitors Monthly 7
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Marketplace Fundamentals Human Resources Homeland Security Multi-Family Housing Other Markets Transportation Finance/Accounting Litigation Insurance Consumer 8
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Growth Acceleration Initiatives Enterprise Screening Risk Mitigation Consumer Direct HireCheck Employee Health Programs SafeRent Substance Abuse Mgt. American Driving Records 2003 Liberatore Services Total Information Source Continental Compliance Employee Info. Services Omega Insurance Services Greystone Health Sciences MedTech Diagnostics Inc. Agency Records, Inc. Credential Check & Personnel Services, Inc. Quantitative Risk Solutions 2004 ProudFoot Reports, Inc. MVR’s Inc. Background Info. Systems Infocheck Ltd. Landlord Protect, Inc. U.D. Registry, Inc. CoreFacts, Inc. CIC Enterprises, Inc. BackTrack Reports, Inc. Nat’l Background Data Alameda Company Compunet Credit Services 2005 Credit Information Group PENDING Data Recovery Services Itax Group, Inc. Priderock Holding Co. Quest Research Ltd. Reverse Merger June 5, 2003 27 ACQUISITIONS TO DATE First American Registry Realeum, Inc. 9
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Strategic Positioning ACQUIRE for Product Expansion CROSS-SELL Services ACQUIRE for Scale / Margin EXPAND Overseas PURSUE Vertical Markets FIVE POINT GROWTH STRATEGY Improvement in Existing Business Lines Employment Background Screening Resident Screening Tax Credits and Incentives Surveillance Computer Forensics 10
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Strategic Positioning ACQUIRE for Product Expansion CROSS-SELL Services ACQUIRE for Scale / Margin EXPAND Overseas PURSUE Vertical Markets FIVE POINT GROWTH STRATEGY Applicant Tracking Skills Assessment Psychological Testing Payroll Benefits Administration Biometrics Electronic Discovery Boutique Databases 11
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Strategic Positioning ACQUIRE for Product Expansion CROSS-SELL Services ACQUIRE for Scale / Margin EXPAND Overseas PURSUE Vertical Markets FIVE POINT GROWTH STRATEGY Implement and Build First Advantage Brand Formalize and Initiate Cross Sell Programs 12
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Strategic Positioning ACQUIRE for Product Expansion CROSS-SELL Services ACQUIRE for Scale / Margin EXPAND Overseas PURSUE Vertical Markets FIVE POINT GROWTH STRATEGY Government Multi-Family Retail Hospitality Transporation Healthcare Insurance 13
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Strategic Positioning ACQUIRE for Product Expansion CROSS-SELL Services ACQUIRE for Scale / Margin EXPAND Overseas PURSUE Vertical Markets FIVE POINT GROWTH STRATEGY Asia and Europe Maintain/Enhance Client Service Experience 14
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Strategic Positioning – Recent Acquisitions Expanding the Foundation Global Expansion Purchased Quest Research Ltd. leading employment screening services in India and East Asia Biometrics Majority ownership in Priderock Holding Company, Inc. a leading biometrics provider of fingerprint and data management technology 15
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March 22, 2005, FADV announced intent to acquire the Credit Information Goup of First American Credit Information Group Mortgage Automotive Direct to Consumer 3 Million Transactions / Month > 37% Market Share Largest Provider to GSE Portals Help Underwrite 1 in 3 Loans in the U.S. Do Business with 10 of Top 10 Lenders 1.5 Million Transactions / Month 30 of the Top 35 Auto Lenders DealerTrack Partnership Parntership with Reynolds & Reynolds Sub Prime Credit Monitoring / Fraud Prevention One-Stop Customer Service Proprietary Alternative Credit Program 1.7 Million Transactions/Month >112 Million Records Dominant Market Share in U.S. Strategic Positioning – Recent Acquisitions 16
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Strategic Positioning Strong Balance Sheet $1 Billion + Market Cap Additional Debt Capacity Pro Forma 2005 Revenue of Approximately $600 Million and Nearly $100 Million in Pre-Tax Earnings Pro Forma 2005 EBITDA Per Share of $2.25 - $2.35 Pro Forma 2005 EPS of $0.91 - $1.01 (including $0.04 per share of acquisition costs related to this transaction) Includes Additional Acquisitions Impact of Strategic Growth 17
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$ Millions Financial Performance Total Revenue Service Revenue$45,959,000 $60,148,000 Reimb. Government Fee Revenue$11,474,000 $12,216,000 TOTAL REVENUE$57,433,000 $72,364,000 1Q ’04 1Q’05 Net Income $ Millions FIRST QUARTER 2005 26.0% Increase 18
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In Millions EBITDA EPS Financial Performance Fully Diluted Operating Margin 2.4% 9.2% FIRST QUARTER 2005 19
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Financial Performance – Segment Data ($ 000’s)Service Revenue Income (Loss) Before Taxes Operating Margin Enterprise Screening$ 45,266$ 6,629 14.64% Risk Mitigation 12,173 2,421 19.89% Consumer Direct 3,340 307 9.19% Corporate & Eliminations (631) (3,800) N/A Total $ 60,148$ 5,557 9.24% FIRST QUARTER 2005 20
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$ Millions Financial Performance Total Revenue Service Revenue $73,040,000 $134,910,000 $221,938,000 Reimb. Government Fee Revenue $ 27,885,000 $ 31,585,000 $ 44,599,000 TOTAL REVENUE $100,925,000 $166,495,000 $266,537,000 2002 2003 2004 Net Income $ Millions FULL YEAR 2004 21
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In Millions EBITDA EPS Financial Performance Fully Diluted Operating Margin 3.6% 8.3% FULL YEAR 2004 22
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Financial Performance – Segment Data ($ 000’s)Service Revenue Income (Loss) Before Taxes Operating Margin Enterprise Screening $ 170,095$ 23,296 13.70% Risk Mitigation 41,419 7,438 17.96% Consumer Direct 12,874 ( 136) -1.06% Corporate & Eliminations (2,450) (12,155) N/A Total $ 221,938$ 18,443 8.31% 2004 Service Revenue By Segment 76% 19% 5% FULL YEAR 2004 23
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Summary Significant future opportunities for growth and expansion of the industry Continued security concerns Anticipated improvement in employment Numerous acquisition prospects Leader in all business lines Improving operational efficiency as consolidation process matures Cross-sell opportunities within and between business lines Seasoned management with proven expertise in consolidation strategies 24
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THE STRENGTH BEHIND YOUR DECISIONS Stephens Information Technology & Services Conference June 9, 2005
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