##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 000-51653
 DealerTrack Holdings, Inc.
 (Exact name of Registrant as specified in its charter)
 Delaware
(State or other jurisdiction of incorporation or 
organization)
    
    52-2336218
(I.R.S. Employer Identification Number)1111 Marcus Ave., Suite M04
Lake Success, NY
(Address of principal executive offices)
    
    11042
(Zip Code)
 (516) 734-3600
 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



DEALERTRACK HOLDINGS, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009
 TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Consolidated Balance Sheets (unaudited)
    
    
    3Consolidated Statements of Operations (unaudited)
    
    
    4Consolidated Statements of Cash Flows (unaudited)
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4. Controls and Procedures
    
    
    29PART II. OTHER INFORMATION
    
    
    29Item 1. Legal Proceedings
    
    
    29Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 5.
Other Information
    
    
    30Item 6. Exhibits
    
    
    30Signature
    
    
    31Exhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 DEALERTRACK HOLDINGS, INC.
 
 CONSOLIDATED BALANCE SHEETS
(unaudited)
 September 30,
    
    
    December 31,2009
    
    
    2008(In thousands, except shareand per share amounts)ASSETSCurrent assetsCash and cash equivalents
    
    $
    189,576
    
    
    $
    155,456Short-term investments
    
    
    1,399
    
    
    
    43,350Accounts receivable, net of allowances of $2,544 and $1,848 as of September 30, 2009 and December 31, 2008, respectively
    
    
    21,090
    
    
    
    18,462Prepaid expenses and other current assets
    
    
    11,347
    
    
    
    9,766Deferred tax assets
    
    
    2,326
    
    
    
    2,195Total current assets
    
    
    225,738
    
    
    
    229,229Long-term investments
    
    
    3,994
    
    
    
    4,392Property and equipment, net
    
    
    14,133
    
    
    
    13,448Software and web site developments costs, net
    
    
    19,535
    
    
    
    12,705Intangible assets, net
    
    
    46,431
    
    
    
    44,405Goodwill
    
    
    132,955
    
    
    
    114,886Deferred taxes and other long-term assets
    
    
    22,468
    
    
    
    18,150Total assets
    
    $
    465,254
    
    
    $
    437,215LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    3,993
    
    
    $
    4,488Accrued compensation and benefits
    
    
    14,131
    
    
    
    7,850Accrued liabilities  other
    
    
    11,875
    
    
    
    11,385Deferred revenues
    
    
    4,943
    
    
    
    5,609Due to acquirees
    
    
    641
    
    
    
    1,740Capital leases payable
    
    
    375
    
    
    
    360Total current liabilities
    
    
    35,958
    
    
    
    31,432Capital leases payable  long-term
    
    
    249
    
    
    
    454Due to acquirees  long-term
    
    
    
    
    
    
    682Deferred tax liabilities  long-term
    
    
    5,013
    
    
    
    2,477Deferred revenue and other long-term liabilities
    
    
    5,598
    
    
    
    5,950Total liabilities
    
    
    46,818
    
    
    
    40,995Commitments and contingencies (Note 16)Stockholders equityPreferred stock, $0.01 par value: 10,000,000 shares authorized and no shares issued and outstanding as of September 30, 2009 and December 31, 2008
    
    
    
    
    
    
    Common stock, $0.01 par value: 175,000,000 shares authorized; 43,451,166 shares issued and 40,412,975 shares outstanding as of September 30,
2009; and 175,000,000 shares authorized; 42,841,737 shares issued and 39,833,616 shares outstanding as of December 31, 2008
    
    
    435
    
    
    
    428Treasury stock, at cost, 3,038,191 shares and 3,008,121 shares as of September 30, 2009 and December 31, 2008, respectively
    
    
    (50,413
    )
    
    
    (50,061
    )Additional paid-in capital
    
    
    446,814
    
    
    
    428,771Deferred stock-based compensation (APB 25)
    
    
    
    
    
    
    (446
    )Accumulated other comprehensive income (loss)
    
    
    4,996
    
    
    
    (2,730
    )Retained earnings
    
    
    16,604
    
    
    
    20,258Total stockholders equity
    
    
    418,436
    
    
    
    396,220Total liabilities and stockholders equity
    
    $
    465,254
    
    
    $
    437,215
   3




---



##### Table of Contents



DEALERTRACK HOLDINGS, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except share and
    
    
    (In thousands, except share andper share amounts)
    
    
    per share amounts)Revenue:Net revenue
    
    $
    58,809
    
    
    $
    60,525
    
    
    $
    172,379
    
    
    $
    188,014Operating expenses:Cost of revenue (1)
    
    
    28,665
    
    
    
    27,940
    
    
    
    86,638
    
    
    
    84,431Product development (1)
    
    
    3,391
    
    
    
    2,875
    
    
    
    11,037
    
    
    
    9,101Selling, general and administrative (1)
    
    
    25,471
    
    
    
    26,654
    
    
    
    83,069
    
    
    
    84,396Total operating expenses
    
    
    57,527
    
    
    
    57,469
    
    
    
    180,744
    
    
    
    177,928Income (loss) from operations
    
    
    1,282
    
    
    
    3,056
    
    
    
    (8,365
    )
    
    
    10,086Interest income
    
    
    194
    
    
    
    1,105
    
    
    
    937
    
    
    
    3,813Other income
    
    
    1
    
    
    
    142
    
    
    
    53
    
    
    
    142Interest expense
    
    
    (27
    )
    
    
    (87
    )
    
    
    (153
    )
    
    
    (253
    )Realized (loss) gain on securities
    
    
    
    
    
    
    (5,664
    )
    
    
    1,393
    
    
    
    (5,664
    )Income (loss) before (provision)
benefit for income taxes
    
    
    1,450
    
    
    
    (1,448
    )
    
    
    (6,135
    )
    
    
    8,124(Provision) benefit for income taxes, net
    
    
    (1,665
    )
    
    
    (1,155
    )
    
    
    2,482
    
    
    
    (5,323
    )Net (loss) income
    
    $
    (215
    )
    
    $
    (2,603
    )
    
    $
    (3,653
    )
    
    $
    2,801Basic net (loss) income per share
applicable to common stockholders
(2)
    
    $
    (0.01
    )
    
    $
    (0.07
    )
    
    $
    (0.09
    )
    
    $
    0.07Diluted net (loss) income per share
applicable to common stockholders
(2)
    
    $
    (0.01
    )
    
    $
    (0.07
    )
    
    $
    (0.09
    )
    
    $
    0.07Weighted average shares outstanding
    
    
    39,705,553
    
    
    
    39,769,935
    
    
    
    39,435,766
    
    
    
    40,965,069Weighted average shares outstanding
assuming dilution
    
    
    39,705,553
    
    
    
    39,769,935
    
    
    
    39,435,766
    
    
    
    42,085,358
 
 (1)
    
    Stock-based compensation expense recorded for the three and nine months ended September 30, 2009 and 2008 was classified as follows: Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009 (3)
    
    
    2008Cost of revenue
    
    $
    582
    
    
    $
    615
    
    
    $
    1,829
    
    
    $
    1,828Product development
    
    
    194
    
    
    
    182
    
    
    
    602
    
    
    
    540Selling, general and administrative
    
    
    2,400
    
    
    
    2,636
    
    
    
    11,557
    
    
    
    8,060
 (2)
    
    Basic and diluted income per share amounts for the three and nine months ended September 30, 2008 have been retroactively adjusted.
For further information refer to Note 5.(3)
    
    Included in stock-based compensation expense for the nine months ended September 30, 2009 was $3.9 million of stock-based
compensation expense related to the realignment of our workforce and business on January 5, 2009. For further information refer to Note
18.   4




---



##### Table of Contents



DEALERTRACK HOLDINGS, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 Nine Months Ended September 30,2009
    
    
    2008(In thousands)Operating Activities:Net (loss) income
    
    $
    (3,653
    )
    
    $
    2,801Adjustments to reconcile net (loss) income to net cash provided by operating activities:Depreciation and amortization
    
    
    26,288
    
    
    
    29,387Deferred tax benefit
    
    
    (4,848
    )
    
    
    (1,866
    )Stock-based compensation expense
    
    
    13,988
    
    
    
    10,428Provision for doubtful accounts and sales credits
    
    
    6,478
    
    
    
    5,980Gain on sale of property and equipment
    
    
    (172
    )
    
    
    Amortization of bond premium
    
    
    56
    
    
    
    84Amortization of deferred interest
    
    
    111
    
    
    
    145Deferred compensation
    
    
    225
    
    
    
    189Amortization of bank financing costs
    
    
    
    
    
    
    31Stock-based compensation windfall tax benefit
    
    
    (1,966
    )
    
    
    (355
    )Realized (gain) loss on securities
    
    
    (1,393
    )
    
    
    5,664Changes in operating assets and liabilities, net of effects of acquisitions:Trade accounts receivable
    
    
    (8,711
    )
    
    
    (4,564
    )Prepaid expenses and other current assets
    
    
    (1,230
    )
    
    
    (991
    )Accounts payable and accrued expenses
    
    
    7,546
    
    
    
    (5,629
    )Deferred revenue and other current liabilities
    
    
    (39
    )
    
    
    997Other long-term liabilities
    
    
    (468
    )
    
    
    2,106Deferred rent
    
    
    113
    
    
    
    420Other long-term assets
    
    
    (200
    )
    
    
    (497
    )Net cash provided by operating activities
    
    
    32,125
    
    
    
    44,330Investing Activities:Capital expenditures
    
    
    (4,197
    )
    
    
    (4,909
    )Restricted cash
    
    
    142
    
    
    
    260Purchase of investments
    
    
    
    
    
    
    (549,158
    )Sale of investments
    
    
    44,569
    
    
    
    648,337Capitalized software and web site development costs
    
    
    (9,977
    )
    
    
    (6,797
    )Proceeds from sale of property and equipment
    
    
    83
    
    
    
    2Payment for acquisition of businesses and intangible assets, net of acquired cash
    
    
    (34,680
    )
    
    
    (3,489
    )Net cash (used in) provided by investing activities
    
    
    (4, 060
    )
    
    
    84,246Financing Activities:Principal payments on capital lease obligations
    
    
    (284
    )
    
    
    (648
    )Proceeds from the exercise of employee stock options
    
    
    2,152
    
    
    
    905Proceeds from employee stock purchase plan
    
    
    700
    
    
    
    1,429Purchase of treasury stock
    
    
    (352
    )
    
    
    (44,820
    )Principal payments on notes payable
    
    
    (636
    )
    
    
    Stock-based compensation windfall tax benefit
    
    
    1,966
    
    
    
    355Net cash provided by (used in) financing activities
    
    
    3,546
    
    
    
    (42,779
    )Net increase in cash and cash equivalents
    
    
    31,611
    
    
    
    85,797Effect of exchange rate changes on cash and cash equivalents
    
    
    2,509
    
    
    
    (1,057
    )Cash, beginning of period
    
    
    155,456
    
    
    
    50,564Cash, end of period
    
    $
    189,576
    
    
    $
    135,304Supplemental disclosure:Cash paid for:Income taxes
    
    $
    4,019
    
    
    $
    6,600Interest
    
    
    41
    
    
    
    105Non-cash investing and financing activities:Asset sale through note receivable
    
    
    500
    
    
    
    Accrued capitalized hardware, software and fixed assets
    
    
    2,314
    
    
    
    1,815Goodwill adjustment
    
    
    (12
    )
    
    
    1,651Deferred compensation reversal to equity
    
    
    225
    
    
    
    189
   5




---



##### Table of Contents



DEALERTRACK HOLDINGS, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 1. Business Description
  2. Basis of Presentation
     3. Recent Accounting Pronouncements
    6




---



##### Table of Contents



4. Fair Value Measurements
  
    
    Level 1  Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or
liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
    
    Level 2  Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
    
    Level 3  Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives
the lowest priority to Level 3 inputs.
   QuotedPrices in
    
    
    Significant
    
    
    SignificantActive
    
    
    Observable
    
    
    UnobservableMarkets
    
    
    Inputs
    
    
    Inputs
    
    
    September 30,(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    2009Cash equivalents (1)
    
    $
    137,463
    
    
    $
    
    
    
    $
    
    
    
    $
    137,463Short-term investments (2)
    
    
    1,399
    
    
    
    
    
    
    
    
    
    
    
    1,399Long-term investments (3)
    
    
    
    
    
    
    
    
    
    
    3,994
    
    
    
    3,994Total
    
    $
    138,862
    
    
    $
    
    
    
    $
    3,994
    
    
    $
    142,856
 
 (1)
    
    Cash equivalents consist primarily of money market funds with original maturity dates of three months or less, for
which we determine fair value through quoted market prices.(2)
    
    As of September 30, 2009, Level 1 short-term investments include investments in tax-advantage preferred securities.(3)
    
    Level 3 long-term investments include $1.6 million in auction rate securities (ARS) invested in tax-exempt state
government obligations that was valued at par. Our intent is not to hold the ARS invested in tax-exempt state
government obligations to maturity, but rather to use the interest reset feature to provide liquidity, if
applicable. We have classified this as long-term due to the maturity date of the security being in 2011, coupled
with ongoing failed auctions in the marketplace.Level 3 long-term investments also include $2.4 million of tax-advantaged preferred stock of a financial
institution. It is uncertain whether we will be able to liquidate these securities within the next twelve months;
as such we have classified them as long-term on our consolidated balance sheets. Due to the lack of observable
market quotes we utilized valuation models that rely exclusively on Level 3 inputs including those that are based
on expected cash flow streams, including assessments of counterparty credit quality, default risk underlying the
security, discount rates and overall capital market liquidity.  Balance as of January 1, 2009
    
    $
    1,550Reclassification from Level 2 investments to Level 3 investments
    
    
    1,360Realized gain on securities included in the statement of operations
    
    
    716Unrealized gain on securities recorded in other comprehensive income
    
    
    368Balance as of September 30, 2009
    
    $
    3,994
  7




---



##### Table of Contents



5. Net (Loss) Income Per Share
 Earnings Per Share
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008 (2)
    
    
    2009
    
    
    2008 (2)Numerator:Net (loss) income
    
    $
    (215
    )
    
    $
    (2,603
    )
    
    $
    (3,653
    )
    
    $
    2,801Net income allocated to participating securities
under two-class method
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (58
    )Net (loss) income applicable to common stockholders
    
    $
    (215
    )
    
    $
    (2,603
    )
    
    $
    (3,653
    )
    
    $
    2,743Denominator:Weighted average common stock outstanding (basic)
    
    
    39,705,553
    
    
    
    39,769,935
    
    
    
    39,435,766
    
    
    
    40,965,069Common equivalent shares from options to purchase
common stock and restricted common stock units (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,120,289Weighted average common stock outstanding (diluted)
    
    
    39,705,553
    
    
    
    39,769,935
    
    
    
    39,435,766
    
    
    
    42,085,358Basic net (loss) income per share
    
    $
    (0.01
    )
    
    $
    (0.07
    )
    
    $
    (0.09
    )
    
    $
    0.07Diluted net (loss) income per share
    
    $
    (0.01
    )
    
    $
    (0.07
    )
    
    $
    (0.09
    )
    
    $
    0.07
 
 (1)
    
    Our restricted common stock units are not considered participating
securities since they do not contain a non-forfeitable right to
dividends and have, therefore, not been included in the denominator
for basic earnings per share calculations.(2)
    
    Earnings per share data presented was adjusted retroactively to
conform to the provisions of ASC Topic 260, which did not have a
significant impact on the per share calculations for the three and
nine months ended September 30, 2008.  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008 (2)
    
    
    2009
    
    
    2008 (2)Stock options
    
    
    4,228,178
    
    
    
    4,718,806
    
    
    
    4,257,675
    
    
    
    2,234,633Restricted stock units
    
    
    680,704
    
    
    
    
    
    
    
    612,466
    
    
    
    Total antidilutive awards
    
    
    4,908,882
    
    
    
    4,718,806
    
    
    
    4,870,141
    
    
    
    2,234,633
  8




---



##### Table of Contents



6. Comprehensive Income (Loss)
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net (loss) income
    
    $
    (215
    )
    
    $
    (2,603
    )
    
    $
    (3,653
    )
    
    $
    2,801Foreign currency translation adjustments
    
    
    4,294
    
    
    
    (2,114
    )
    
    
    6,835
    
    
    
    (3,747
    )Unrealized gain (loss) on available for sale securities
    
    
    321
    
    
    
    210
    
    
    
    891
    
    
    
    (132
    )Total comprehensive income (loss)
    
    $
    4,400
    
    
    $
    (4,507
    )
    
    $
    4,073
    
    
    $
    (1,078
    )
  7. Stock-Based Compensation Expense
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Stock options
    
    $
    1,731
    
    
    $
    2,114
    
    
    $
    8,921
    
    
    $
    6,127Restricted common stock
    
    
    972
    
    
    
    1,260
    
    
    
    3,656
    
    
    
    4,049Restricted stock units
    
    
    473
    
    
    
    
    
    
    
    1,351
    
    
    
    ESPP
    
    
    
    
    
    
    59
    
    
    
    60
    
    
    
    252Total stock-based compensation expense
    
    $
    3,176
    
    
    $
    3,433
    
    
    $
    13,988
    
    
    $
    10,428
    8. Business Combinations
 AAX Acquisition
 ®
  9




---



##### Table of Contents



Current assets
    
    $
    489Property and equipment
    
    
    1,035Intangible assets
    
    
    16,639Goodwill
    
    
    15,283Total assets acquired
    
    
    33,446Total liabilities assumed
    
    
    (2,571
    )Net assets acquired
    
    $
    30,875
     Other AAX deal terms
 Service Credits
  Purchase Price Adjustment
    10




---



##### Table of Contents



Unaudited Pro Forma Summary of Operations
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands, except share and per
    
    
    (in thousands, except share and pershare amounts)
    
    
    share amounts)(Unaudited)
    
    
    (Unaudited)Net revenue
    
    $
    58,809
    
    
    $
    67,145
    
    
    $
    173,962
    
    
    $
    207,594Net loss
    
    $
    (215
    )
    
    $
    (3,671
    )
    
    $
    (3,878
    )
    
    $
    (1,193
    )Basic net loss per
share applicable to
common stockholders
    
    $
    (0.01
    )
    
    $
    (0.09
    )
    
    $
    (0.10
    )
    
    $
    (0.03
    )Diluted net loss
per share
applicable to
common stockholders
    
    $
    (0.01
    )
    
    $
    (0.09
    )
    
    $
    (0.10
    )
    
    $
    (0.03
    )
 Curomax Acquisition
  ASM Acquisition
  9. Stock Repurchase Program
  10. Property and Equipment
  EstimatedUseful Life
    
    
    September 30,
    
    
    December 31,(Years)
    
    
    2009
    
    
    2008Computer equipment
    
    
    35
    
    
    $
    22,447
    
    
    $
    20,431Office equipment
    
    
    5
    
    
    
    3,598
    
    
    
    2,896Furniture and fixtures
    
    
    5
    
    
    
    3,298
    
    
    
    3,068Leasehold improvements
    
    
    511
    
    
    
    3,068
    
    
    
    1,233Total property and equipment, gross
    
    
    
    
    
    
    32,411
    
    
    
    27,628Less: Accumulated depreciation and amortization
    
    
    
    
    
    
    (18,278
    )
    
    
    (14,180
    )Total property and equipment, net
    
    
    
    
    
    $
    14,133
    
    
    $
    13,448
  11




---



##### Table of Contents



11. Intangible Assets
  September 30, 2009
    
    
    December 31, 2008Gross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    AmortizationBook
    
    
    Accumulated
    
    
    Book
    
    
    Accumulated
    
    
    PeriodValue
    
    
    Amortization
    
    
    Value
    
    
    Amortization
    
    
    (Years)Customer contracts
    
    $
    39,933
    
    
    $
    (22,223
    )
    
    $
    33,673
    
    
    $
    (17,289
    )
    
    
    27Database
    
    
    13,825
    
    
    
    (10,413
    )
    
    
    13,333
    
    
    
    (8,818
    )
    
    
    36Trade names
    
    
    12,510
    
    
    
    (6,581
    )
    
    
    10,500
    
    
    
    (5,469
    )
    
    
    510Technology
    
    
    27,170
    
    
    
    (9,815
    )
    
    
    22,684
    
    
    
    (7,209
    )
    
    
    15Non-compete agreement
    
    
    6,585
    
    
    
    (4,560
    )
    
    
    10,697
    
    
    
    (7,697
    )
    
    
    25Total
    
    $
    100,023
    
    
    $
    (53,592
    )
    
    $
    90,887
    
    
    $
    (46,482
    )
   2010
    
    $
    19,1062011
    
    
    10,3542012
    
    
    5,4762013
    
    
    3,4392014
    
    
    2,027Thereafter
    
    
    939Total
    
    $
    41,341
 12. Goodwill
  Balance as of January 1, 2009
    
    $
    114,886Acquisition of AAX (see Note 8)
    
    
    15,283Impact of change in Canadian dollar exchange rate
    
    
    2,998Exit from SCS business (See Note 19)
    
    
    (200
    )Other
    
    
    (12
    )Balance as of September 30, 2009
    
    $
    132,955
  13. Accrued Liabilities  Other
  September 30,
    
    
    December 31,2009
    
    
    2008Revenue share
    
    $
    1,507
    
    
    $
    1,700Customer deposits
    
    
    2,363
    
    
    
    2,749Sales taxes
    
    
    1,472
    
    
    
    1,511Software licenses
    
    
    1,125
    
    
    
    1,341Professional fees
    
    
    1,568
    
    
    
    1,158Accrued Curomax contingent consideration (Note 8)
    
    
    
    
    
    
    1,837Other
    
    
    3,840
    
    
    
    1,089Total accrued liabilities  other
    
    $
    11,875
    
    
    $
    11,385
  12




---



##### Table of Contents



14. Income Taxes
    15. Long-Term Incentive Equity Awards
     Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008EBITDA Performance Award
    
    $
    116
    
    
    $
    166
    
    
    $
    354
    
    
    $
    500Market Value Award
    
    
    138
    
    
    
    187
    
    
    
    181
    
    
    
    561Total
    
    $
    254
    
    
    $
    353
    
    
    $
    535
    
    
    $
    1,061
   13




---



##### Table of Contents



16. Commitments and Contingencies
 Retail Sales Tax
      Commitments
    Legal Proceedings
   14




---



##### Table of Contents



DealerTrack, Inc. v. Finance Express et al., CV-06-2335; DealerTrack Inc. v. RouteOne and
Finance Express et al., CV-06-6864; and DealerTrack Inc. v. RouteOne and Finance Express et al.,
CV-07-215
    Markman
    17. Segment Information
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Transaction services revenue
    
    $
    25,483
    
    
    $
    33,007
    
    
    $
    74,169
    
    
    $
    107,495Subscription services revenue
    
    
    28,978
    
    
    
    23,797
    
    
    
    85,949
    
    
    
    69,060Other
    
    
    4,348
    
    
    
    3,721
    
    
    
    12,261
    
    
    
    11,459Total net revenue
    
    $
    58,809
    
    
    $
    60,525
    
    
    $
    172,379
    
    
    $
    188,014
  15




---



##### Table of Contents



18. Realignment of Workforce and Business
   Balance as of

    
    
    
    
    
    
    
    
    
    
    Balance as ofJanuary 1,
    
    
    
    
    
    
    
    
    
    
    September 30,2009
    
    
    Charges
    
    
    Cash Payments
    
    
    2009Severance
    
    $
    
    
    
    $
    2,689
    
    
    $
    2,689
    
    
    $
    Other benefits
    
    
    
    
    
    
    155
    
    
    
    155
    
    
    
    Total
    
    $
    
    
    
    $
    2,844
    
    
    $
    2,844
    
    
    $
    
 19. Exit from SCS Business
    20. 401(k) Plan
  21. Employee Stock Purchase Plan
  22. Third Amended and Restated 2005 Incentive Award Plan
   16




---



##### Table of Contents



23. Stock Option Exchange Program
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 You should read the following discussion and analysis of our financial condition and results
of operations in conjunction with our consolidated financial statements. Certain statements in this
Quarterly Report on Form 10-Q are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities
Exchange Act of 1934, as amended (the Exchange Act). These statements involve a number of risks,
uncertainties and other factors that could cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements expressed or implied
by these forward-looking statements. Factors that could materially affect such forward-looking
statements can be found in the sections entitled Risk Factors in Part II, Item 1A. in this
Quarterly Report on Form 10-Q and in Part I, Item 1A. in our Annual Report on Form 10-K for the
year ended December 31, 2008 filed with the SEC on February 24, 2009 and amended on April 30, 2009
and September 24, 2009. Investors are
urged to consider these factors carefully in evaluating the forward-looking statements and are
cautioned not to place undue reliance on such forward-looking statements. The forward-looking
statements made herein are only made as of the date hereof and we will undertake no obligation to
publicly update such forward-looking statements to reflect subsequent events or circumstances.
 Overview
     17




---



##### Table of Contents



Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008EBITDA and Other Business Statistics:EBITDA (1)
    
    $
    9,683
    
    
    $
    6,713
    
    
    $
    19,369
    
    
    $
    33,951Capital expenditures, software and web site development costs
    
    $
    5,643
    
    
    $
    5,627
    
    
    $
    16,696
    
    
    $
    13,568Active dealers in our network as of end of the period (2)
    
    
    17,241
    
    
    
    21,001
    
    
    
    17,241
    
    
    
    21,001Active financing sources in our network as of end of period (3)
    
    
    790
    
    
    
    706
    
    
    
    790
    
    
    
    706Active lender to dealer relationships (4)
    
    
    120,305
    
    
    
    179,102
    
    
    
    120,305
    
    
    
    179,102Subscribing dealers in our network as of end of the period (5)
    
    
    13,959
    
    
    
    14,229
    
    
    
    13,959
    
    
    
    14,229Transactions processed (6)
    
    
    13,804
    
    
    
    19,219
    
    
    
    41,288
    
    
    
    65,359Average transaction price (7)
    
    $
    1.85
    
    
    $
    1.72
    
    
    $
    1.80
    
    
    $
    1.65Average monthly subscription revenue per subscribing dealership (8)
    
    $
    692
    
    
    $
    557
    
    
    $
    684
    
    
    $
    539
 
 (1)
    
    EBITDA represents net (loss) income before interest (income) expense,
taxes, depreciation and amortization. We present EBITDA because we
believe that EBITDA provides useful information with respect to the
performance of our fundamental business activities and is also
frequently used by securities analysts, investors and other interested
parties in the evaluation of comparable companies. We rely on EBITDA
as a primary measure to review and assess the operating performance of
our company and management team in connection with our executive
compensation plan incentive payments.EBITDA has limitations as an analytical tool and you should not
consider it in isolation, or as a substitute for analysis of our
results as reported under Generally Accepted Accounting Principles in
the United States of America (GAAP). Some of these limitations are: 
    
    EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
    
    EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
    
    Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have
to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and
    
    Other companies may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our
business. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA only supplementally. EBITDA is a measure
of our performance that is not required by, or presented in accordance with, GAAP. EBITDA is not a measurement of our financial performance under
GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with
GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008GAAP net (loss) income
    
    $
    (215
    )
    
    $
    (2,603
    )
    
    $
    (3,653
    )
    
    $
    2,801Interest income
    
    
    (194
    )
    
    
    (1,105
    )
    
    
    (937
    )
    
    
    (3,813
    )Interest expense
    
    
    27
    
    
    
    87
    
    
    
    153
    
    
    
    253Provision (benefit) for income taxes
    
    
    1,665
    
    
    
    1,155
    
    
    
    (2,482
    )
    
    
    5,323Depreciation of property and equipment and
amortization of capitalized software and website
costs
    
    
    3,429
    
    
    
    3,704
    
    
    
    10,895
    
    
    
    9,785Amortization of acquired identifiable intangibles
    
    
    4,971
    
    
    
    5,475
    
    
    
    15,393
    
    
    
    19,602EBITDA (Non-GAAP)
    
    $
    9,683
    
    
    $
    6,713
    
    
    $
    19,369
    
    
    $
    33,951
  18




---



##### Table of Contents



(2)
    
    We consider a dealer to be active as of a date if the dealer completed
at least one revenue-generating credit application processing
transaction using the DealerTrack network during the most recently
ended calendar month.(3)
    
    We consider a financing source to be active in our network as of a
date if it is accepting credit application data electronically from
dealers in the DealerTrack network, including financing sources
visible to dealers through drop down menus.(4)
    
    Lender to dealer relationships are made up of two components, the
number of financing sources on the DealerTrack network and the number
of active dealers submitting applications. Lender to dealer
relationships are counted by pair. For example, one lenders
relationship with 50 dealerships is counted as fifty relationships;
the next lenders relationship with the same 50 dealership would bring
our relationship count to 100. The number of lender to dealer
relationships is impacted by both the loss of lenders or dealers. For
example, if a lender goes out of business, exits indirect auto
financing or reduces the number of dealers it does business with, our
relationship count is negatively impacted by each of the dealers that
are no longer doing business with that lender. If a dealer goes out of
business our relationship count is also negatively impacted.(5)
    
    Represents the number of dealerships with a current subscription in
the DealerTrack or DealerTrack Canada networks at the end of a given
period.(6)
    
    Represents revenue-generating transactions processed in the
DealerTrack, DealerTrack Digital Services and DealerTrack Canada
networks at the end of a given period.(7)
    
    Represents the average revenue earned per transaction processed in the
DealerTrack, DealerTrack Digital Services and DealerTrack Canada
networks during a given period.(8)
    
    Represents net subscription revenue divided by subscribing dealers at
the end of a given period in the DealerTrack and DealerTrack Canada
networks. Revenue
 Transaction Services Revenue.
 Subscription Services Revenue.
 Other Revenue.
 Operating Expenses
 Cost of Revenue.
 Product Development Expenses.
 Selling, General and Administrative Expenses.
   19




---



##### Table of Contents



Fair Value Measurements
  
    
    Level 1  Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or
liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
    
    Level 2  Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
    
    Level 3  Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives
the lowest priority to Level 3 inputs.
   Quoted
    
    
    SignificantPrices in
    
    
    Other
    
    
    SignificantActive
    
    
    Observable
    
    
    UnobservableMarkets
    
    
    Inputs
    
    
    Inputs
    
    
    September 30,(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    2009Cash equivalents (1)
    
    $
    137,463
    
    
    $
    
    
    
    $
    
    
    
    $
    137,463Short-term investments (2)
    
    
    1,399
    
    
    
    
    
    
    
    
    
    
    
    1,399Long-term investments (3)
    
    
    
    
    
    
    
    
    
    
    3,994
    
    
    
    3,994Total
    
    $
    138,862
    
    
    $
    
    
    
    $
    3,994
    
    
    $
    142,856
 
 (1)
    
    Cash equivalents consist primarily of money market funds with original maturity dates of three months or less, for
which we determine fair value through quoted market prices.(2)
    
    As of September 30, 2009, Level 1 short-term investments include investments in tax-advantage preferred securities.(3)
    
    Level 3 long-term investments include $1.6 million in auction rate securities (ARS) invested in tax-exempt state
government obligations that was valued at par. Our intent is not to hold the ARS invested in tax-exempt state
government obligations to maturity, but rather to use the interest reset feature to provide liquidity, if
applicable. We have classified this as long-term due to the maturity date of the security being in 2011, coupled
with ongoing failed auctions in the marketplace.Level 3 long-term investments also include $2.4 million of tax-advantaged preferred stock of a financial
institution. It is uncertain whether we will be able to liquidate these securities within the next twelve months;
as such we have classified them as long-term on our consolidated balance sheets. Due to the lack of observable
market quotes we utilized valuation models that rely exclusively on Level 3 inputs including those that are based
on expected cash flow streams, including assessments of counterparty credit quality, default risk underlying the
security, discount rates and overall capital market liquidity.  20




---



##### Table of Contents



Balance as of January 1, 2009
    
    $
    1,550Reclassification from Level 2 investments to Level 3 investments
    
    
    1,360Realized gain on securities included in the statement of operations
    
    
    716Unrealized gain on securities recorded in other comprehensive income
    
    
    368Balance as of September 30, 2009
    
    $
    3,994
 Realignment of Workforce and Business
   Balance as of

    
    
    
    
    
    
    
    
    
    
    Balance as ofJanuary 1,
    
    
    
    
    
    
    
    
    
    
    September 30,2009
    
    
    Charges
    
    
    Cash Payments
    
    
    2009Severance
    
    $
    
    
    
    $
    2,689
    
    
    $
    2,689
    
    
    $
    Other benefits
    
    
    
    
    
    
    155
    
    
    
    155
    
    
    
    Total
    
    $
    
    
    
    $
    2,844
    
    
    $
    2,844
    
    
    $
    
 Critical Accounting Policies and Estimates
     21




---



##### Table of Contents



Results of Operations
  Three Months September 30,
    
    
    Nine Months September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008% of Net
    
    
    
    
    
    
    % of Net
    
    
    
    
    
    
    % of Net
    
    
    
    
    
    
    % of Net$ Amount
    
    
    Revenue
    
    
    $ Amount
    
    
    Revenue
    
    
    $ Amount
    
    
    Revenue
    
    
    $ Amount
    
    
    Revenue(In thousands, except percentages)
    
    
    (In thousands, except percentages)Consolidated Statements of
Operations Data:Net revenue
    
    $
    58,809
    
    
    
    100.0
    %
    
    $
    60,525
    
    
    
    100.0
    %
    
    $
    172,379
    
    
    
    100.0
    %
    
    $
    188,014
    
    
    
    100.0
    %Operating expenses:Cost of revenue
    
    
    28,665
    
    
    
    48.7
    
    
    
    27,940
    
    
    
    46.1
    
    
    
    86,638
    
    
    
    50.3
    
    
    
    84,431
    
    
    
    44.9Product development
    
    
    3,391
    
    
    
    5.8
    
    
    
    2,875
    
    
    
    4.8
    
    
    
    11,037
    
    
    
    6.4
    
    
    
    9,101
    
    
    
    4.9Selling, general and
administrative
    
    
    25,471
    
    
    
    43.4
    
    
    
    26,654
    
    
    
    44.0
    
    
    
    83,069
    
    
    
    48.1
    
    
    
    84,396
    
    
    
    44.9Total operating expenses
    
    
    57,527
    
    
    
    97.9
    
    
    
    57,469
    
    
    
    94.9
    
    
    
    180,744
    
    
    
    104.8
    
    
    
    177,928
    
    
    
    94.7Income (loss) from operations
    
    
    1,282
    
    
    
    2.1
    
    
    
    3,056
    
    
    
    5.1
    
    
    
    (8,365
    )
    
    
    (4.8
    )
    
    
    10,086
    
    
    
    5.3Interest income
    
    
    194
    
    
    
    0.3
    
    
    
    1,105
    
    
    
    1.8
    
    
    
    937
    
    
    
    0.5
    
    
    
    3,813
    
    
    
    2.0Other income
    
    
    1
    
    
    
    
    
    
    
    142
    
    
    
    0.2
    
    
    
    53
    
    
    
    
    
    
    
    142
    
    
    
    0.1Interest expense
    
    
    (27
    )
    
    
    
    
    
    
    (87
    )
    
    
    (0.1
    )
    
    
    (153
    )
    
    
    
    
    
    
    (253
    )
    
    
    (0.1
    )Realized (loss) gain on
securities
    
    
    
    
    
    
    
    
    
    
    (5,664
    )
    
    
    (9.4
    )
    
    
    1,393
    
    
    
    0.8
    
    
    
    (5,664
    )
    
    
    (3.0
    )Income (loss) before benefit
(provision) for income taxes
    
    
    1,450
    
    
    
    2.4
    
    
    
    (1,448
    )
    
    
    (2.4
    )
    
    
    (6,135
    )
    
    
    (3.5
    )
    
    
    8,124
    
    
    
    4.3(Provision) benefit for
income taxes, net
    
    
    (1,665
    )
    
    
    (2.8
    )
    
    
    (1,155
    )
    
    
    (1.9
    )
    
    
    2,482
    
    
    
    1.4
    
    
    
    (5,323
    )
    
    
    (2.8
    )Net (loss) income
    
    $
    (215
    )
    
    
    (0.4)
    %
    
    $
    (2,603
    )
    
    
    (4.3)
    %
    
    $
    (3,653
    )
    
    
    (2.1)
    %
    
    $
    2,801
    
    
    
    1.5
    %
 Three Months Ended September 30, 2009 and 2008
 Revenue
 Three Months Ended September 30,2009
    
    
    2008Transaction services revenue
    
    $
    25,483
    
    
    $
    33,007Subscription services revenue
    
    
    28,978
    
    
    
    23,797Other
    
    
    4,348
    
    
    
    3,721Total net revenue
    
    $
    58,809
    
    
    $
    60,525
  Transaction Services Revenue.
  22




---



##### Table of Contents



Subscription Services Revenue.
 Operating Expenses
 Three Months Ended September 30,2009
    
    
    2008Cost of revenue
    
    $
    28,665
    
    
    $
    27,940Product development
    
    
    3,391
    
    
    
    2,875Selling, general and administrative
    
    
    25,471
    
    
    
    26,654Total operating expenses
    
    $
    57,527
    
    
    $
    57,469
 Cost of Revenue.
 Product Development Expenses.
 Selling, General and Administrative Expenses.
 Interest Income
 Three Months Ended September 30,2009
    
    
    2008Interest income
    
    $
    194
    
    
    $
    1,105
   23




---



##### Table of Contents



Realized Loss on Securities
 Three Months Ended September 30,2009
    
    
    2008Realized loss on securities
    
    $
    
    
    
    $
    (5,664
    )
  Provision for Income Taxes, Net
 Three Months Ended September 30,2009
    
    
    2008Provision for income taxes, net
    
    $
    (1,665
    )
    
    $
    (1,155
    )
  Nine Months Ended September 30, 2009 and 2008
 Revenue
 Nine Months Ended September 30,2009
    
    
    2008Transaction services revenue
    
    $
    74,169
    
    
    $
    107,495Subscription services revenue
    
    
    85,949
    
    
    
    69,060Other
    
    
    12,261
    
    
    
    11,459Total net revenue
    
    $
    172,379
    
    
    $
    188,014
  Transaction Services Revenue.
  24




---



##### Table of Contents



Subscription Services Revenue.
 Operating Expenses
 Nine Months Ended September 30,2009
    
    
    2008Cost of revenue
    
    $
    86,638
    
    
    $
    84,431Product development
    
    
    11,037
    
    
    
    9,101Selling, general and administrative
    
    
    83,069
    
    
    
    84,396Total operating expenses
    
    $
    180,744
    
    
    $
    177,928
 Cost of Revenue.
 Product Development Expenses.
 Selling, General and Administrative Expenses.
 Interest Income
 Nine Months Ended September 30,2009
    
    
    2008Interest income
    
    $
    937
    
    
    $
    3,813
  25




---



##### Table of Contents



Realized Gain (Loss) on Securities
 Nine Months Ended September 30,2009
    
    
    2008Realized gain (loss) on securities
    
    $
    1,393
    
    
    $
    (5,664
    )
   Benefit (Provision) for Income Taxes, Net
 Nine Months Ended September 30,2009
    
    
    2008Benefit (provision) for income taxes, net
    
    $
    2,482
    
    
    $
    (5,323
    )
  Liquidity and Capital Resources
      26




---



##### Table of Contents



Nine Months Ended September 30,2009
    
    
    2008Net cash provided by operating activities
    
    $
    32,125
    
    
    $
    44,330Net cash (used in) provided by investing activities
    
    $
    (4,060
    )
    
    $
    84,246Net cash provided by (used in) financing activities
    
    $
    3,546
    
    
    $
    (42,779
    )
 Operating Activities
  Investing Activities
  Financing Activities
  Contractual Obligations
   27




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Industry Trends
   Effects of Inflation
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Foreign Currency Exposure
  Interest Rate Exposure
   28




---



##### Table of Contents



Item 4. Controls and Procedures
 Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  DealerTrack, Inc. v. Finance Express et al., CV-06-2335; DealerTrack Inc. v. RouteOne and
Finance Express et al., CV-06-6864; and DealerTrack Inc. v. RouteOne and Finance Express et al.,
CV-07-215
    Markman
    29




---



##### Table of Contents



Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Purchases of Equity Securities by the Issuer
   Total
    
    
    MaximumNumber of
    
    
    NumberShares
    
    
    of SharesPurchased
    
    
    ThatTotal
    
    
    Average
    
    
    as Part of
    
    
    May Yet beNumber
    
    
    Price
    
    
    Publicly
    
    
    Purchasedof Shares
    
    
    Paid per
    
    
    Announced
    
    
    Under thePeriod
    
    Purchased
    
    
    Share
    
    
    Program
    
    
    ProgramJuly 2009
    
    
    837
    
    
    $
    16.24
    
    
    
    n/a
    
    
    
    n/aAugust 2009
    
    
    254
    
    
    $
    19.43
    
    
    
    n/a
    
    
    
    n/aSeptember 2009
    
    
    
    
    
    $
    
    
    
    
    n/a
    
    
    
    n/aTotal
    
    
    1,091
 
 Item 5. Other Information
 Form 10-Q.
 
 Item 6. Exhibits
 ExhibitNumber
    
    Description of Document10.1
    
    
    Amendment No. 2 To Amended And Restated Executive Employment
Agreement by and between Mark F. ONeil and DealerTrack Holdings,
Inc., dated as of November 3, 2009.10.2
    
    
    Amendment No. 2 To Amended And Restated Executive Employment
Agreement by and between Eric D. Jacobs and DealerTrack Holdings,
Inc., dated as of November 3, 2009.10.3
    
    
    Amendment No. 2 To Amended And Restated Executive Employment
Agreement by and between Rajesh Sundaram and DealerTrack Holdings,
Inc., dated as of November 4, 2009.31.1
    
    
    Certification of Mark F. ONeil, Chairman, President and Chief
Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Eric D. Jacobs, Senior Vice President, Chief
Financial and Administrative Officer, pursuant to Rule
13a-14(a)and 15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    
    Certifications of Mark F. ONeil, Chairman, President and Chief
Executive Officer, and Eric D. Jacobs, Senior Vice President,
Chief Financial and Administrative Officer, pursuant to 18 U.S.C
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
  30




---



##### Table of Contents



SIGNATURE
  DealerTrack Holdings, Inc.
(Registrant)Date: November 4, 2009
    /s/ Eric D. JacobsEric D. JacobsSenior Vice President, Chief
Financial and
Administrative Officer
(Principal Financial and Accounting Officer)  31




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Document10.1
    
    
    Amendment No. 2 To Amended And Restated Executive Employment
Agreement by and between Mark F. ONeil and DealerTrack Holdings,
Inc., dated as of November 3, 2009.10.2
    
    
    Amendment No. 2 To Amended And Restated Executive Employment
Agreement by and between Eric D. Jacobs and DealerTrack Holdings,
Inc., dated as of November 3, 2009.10.3
    
    
    Amendment No. 2 To Amended And Restated Executive Employment
Agreement by and between Rajesh Sundaram and DealerTrack Holdings,
Inc., dated as of November 4, 2009.31.1
    
    
    Certification of Mark F. ONeil, Chairman, President and Chief
Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Eric D. Jacobs, Senior Vice President, Chief
Financial and Administrative Officer, pursuant to Rule
13a-14(a)and 15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    
    Certifications of Mark F. ONeil, Chairman, President and Chief
Executive Officer, and Eric D. Jacobs, Senior Vice President,
Chief Financial and Administrative Officer, pursuant to 18 U.S.C
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
  32