Intersections Inc. Reports Record Fourth Quarter 2005 and Full Year Earnings

Intersections Inc. (Nasdaq:INTX) today announcedfinancial results for the quarter and year ended December 31, 2005.Net income for the quarter ended December 31, 2005 was $4.0 million,compared to $2.4 million for the quarter ended December 31, 2004, anincrease of 67.6 percent. The fourth quarter of 2004 included anincrease in tax expense of $0.9 million related to a write off ofdeferred tax. Diluted earnings per share ("EPS") were $0.23 for thefourth quarter of 2005 and $0.70 for the year ended December 31, 2005,compared to $0.13 for the fourth quarter of 2004 and $0.64 for theyear ending December 31, 2004.

"We are very pleased with our financial results in the fourthquarter and full year of 2005. Strong subscriber growth continued intothe fourth quarter with a 27 percent increase in subscribers from theend of 2004, exceeding our expectations. We look forward to thesuccessful implementation of our strategic initiatives in 2006," saidChairman and Chief Executive Officer, Michael Stanfield.

Fourth Quarter 2005 Financial Highlights:

-- Total subscribers increased to approximately 3.7 million as of December 31, 2005, compared to approximately 3.4 million as of September 30, 2005, an increase of 7.2 percent. Subscriber additions in the fourth quarter of 2005 were approximately 770,000.

-- Total revenue for the fourth quarter of 2005 was $43.2 million, including $3.4 million from American Background Information Services, Inc. ("ABI") compared to $42.6 million, including $3.8 million from ABI, for the third quarter of 2005 and $35.9 million for the fourth quarter of 2004, including $1.3 million from ABI, which was acquired in November 2004.

-- Subscription revenue, net of marketing and commissions associated with subscription revenue, increased to $27.7 million for the fourth quarter of 2005 from $26.3 million for the third quarter of 2005, and from $22.9 million for the fourth quarter of 2004, an increase of 5.5 percent and 20.9 percent, respectively. Subscription revenue, net of marketing and commissions associated with subscription revenue, is a non-GAAP financial measure that we believe is important to investors and one that we utilize in managing our business as it normalizes the effect of changes in the mix of indirect and direct marketing arrangements.

-- Pre-tax income was $6.3 million or 14.5 percent of revenue, for the fourth quarter of 2005, compared to $5.8 million, or 13.6 percent of revenue, for the third quarter of 2005 and $5.6 million, or 15.7 percent of revenue, for the fourth quarter of 2004.

-- Cash flow provided by operations for the quarter ended December 31, 2005, was approximately $8.9 million.

Twelve Month Results:

-- Total revenue for the year ended December 31, 2005, was $165.2 million, including $13.8 million from ABI, compared to $152.9 million for the same period in 2004, including $1.3 million from ABI, which was acquired in November 2004.

-- Subscription revenue, net of marketing and commissions associated with subscription revenue, increased 21.5 percent to $102.6 million for the year ended December 31, 2005, from $84.5 million for the same period in 2004.

-- Pre-tax income increased 3.5 percent to $20.2 million for the year ended December 31, 2005, from $19.5 million for the year ended December 31, 2004. Pre-tax income for the year ended December 31, 2005 included a software impairment charge recognized during the first quarter of 2005 of approximately $1.5 million that was due primarily to the decision to revise our development approach for our small business product in an effort to accelerate its launch while reducing our overall investment in the project.

-- Net income was $12.5 million, or $0.70 per diluted share, for the year ended December 31, 2005, compared to $10.9 million, or $0.64 per diluted share, for the year ended December 31, 2004.

-- Cash flow provided by operations for the year ended December 31, 2005 was approximately $17.6 million, including a $5.5 million cash outflow in the first quarter for prepaid royalty payments incurred in connection with certain exclusive rights under two agreements that provide for the receipt of data and other information to be used primarily in our identity theft prevention product.

Stock Repurchase Program:

Under the stock repurchase program, Intersections is authorized torepurchase up to $20 million of its outstanding shares of common stockfrom time to time, depending on market conditions, share price andother factors. The repurchases may be made on the open market, inblock trades, through privately negotiated transactions or otherwise,and the program may be suspended or discontinued at any time. Duringthe fourth quarter of 2005 Intersections repurchased 225,000 shares,for approximately $2.0 million, under this program. Total repurchasesfor the year ended December 31, 2005, were approximately 965,000shares, for approximately $8.6 million.

Intersections' year end 2005 results will be discussed in moredetail on February 21, 2006 at 5:00 pm EST via teleconference. A liveaudio webcast will be available on Intersections' Web site atwww.intersections.com or www.fulldisclosure.com. Participants areencouraged to go to the selected Web site at least 15 minutes inadvance to register, download, and install any necessary audiosoftware. This webcast will be archived and available for replay afterthe teleconference. Additionally, the call will be available fortelephonic replay from 7:00 p.m. Tuesday, February 21, through 11:59p.m. Thursday, February 23, 2006, at 888.286.8010 (Passcode:62255350).

Statements in this press release relating to future plans,results, performance, expectations, achievements and the like areconsidered "forward-looking statements." Those forward-lookingstatements involve known and unknown risks and are subject to changebased on various factors and uncertainties that may cause actualresults to differ materially from those expressed or implied by thosestatements, including without limitation the effect of new subscriberadditions. Factors and uncertainties that may cause actual results todiffer include but are not limited to the risks disclosed in theCompany's filings with the U.S. Securities and Exchange Commission.The Company undertakes no obligation to revise or update anyforward-looking statements.

About Intersections Inc.

Intersections Inc. is the leading provider of branded andfully-customized consumer credit management and identity theftprevention, detection and resolution services to the customers of manyof North America's largest financial services companies. Byintegrating our technology solutions, marketing capabilities, andend-to-end production and fulfillment infrastructure, we assist thesecompanies in meeting the needs of their customers in a secure,efficient and ethical environment. We currently safeguard more than 5million customers in the U.S. and Canada - including approximately 3.7million subscribers to our service offerings as well as otherconsumers who receive special services such as data breach mitigationand identity theft resolution. We receive those customers primarilythrough our partners, as well as direct-to-consumer through ourIDENTITY GUARD(R) and SBGUARDIAN(SM) brands. Additionally, we offerpre-employment background screening through our wholly-ownedsubsidiary, American Background Information Services, Inc. Learn moreabout Intersections Inc. at www.intersections.com.

INTERSECTIONS INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
(in thousands, except share data)

2005 2004 2005 2004
--------- --------- --------- ---------

Revenue $ 43,219 $ 35,934 $165,171 $152,916
Operating expenses:
Marketing 5,025 4,699 19,646 19,328
Commissions 6,479 6,957 26,687 46,719
Cost of revenue 15,174 11,283 57,351 40,093
General and administrative 8,879 6,312 34,518 23,330
Depreciation and
amortization 1,826 1,296 6,457 3,991
Impairment of software
development - - 1,515 -
--------- --------- --------- ---------

Total operating expenses 37,383 30,547 146,174 133,461
--------- --------- --------- ---------

Income from operations 5,836 5,387 18,997 19,455
Interest income, net 397 196 1,183 56
Other income, net 31 51 37 31
--------- --------- --------- ---------

Income before income taxes 6,264 5,634 20,217 19,542

Income tax expense (2,268) (3,249) (7,747) (8,597)
--------- --------- --------- ---------

Net income $ 3,996 $ 2,385 $ 12,470 $ 10,945
========= ========= ========= =========

Net income per basic share $ 0.24 $ 0.14 $ 0.73 $ 0.85

Net income per diluted share $ 0.23 $ 0.13 $ 0.70 $ 0.64

Weighted average common shares
outstanding 16,776 17,171 17,002 12,929
Dilutive effect of common
stock equivalents 644 1,293 813 4,588
--------- --------- --------- ---------
Weighted average common shares
outstanding - assuming
dilution 17,420 18,464 17,815 17,517
========= ========= ========= =========



INTERSECTIONS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

December 31, December 31,
2005 2004
------------ ------------
(in thousands)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 17,555 $ 12,027
Short-term investments 34,087 40,171
Accounts receivable, net 14,746 9,970
Prepaid expenses and other current assets 3,071 2,795
Deferred subscription solicitation costs 8,818 9,185
Deferred tax asset - 490
------------ ------------
Total current assets 78,277 74,638

PROPERTY AND EQUIPMENT--Net 20,653 15,821
GOODWILL 16,741 16,314
INTANGIBLE ASSETS 1,325 1,954
OTHER ASSETS 6,191 384
------------ ------------
TOTAL ASSETS $ 123,187 $ 109,111
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable $ 3,863 $ 3,593
Accrued expenses and other current
liabilities 8,480 6,051
Accrued payroll and employee benefits 3,094 2,206
Commissions payable 1,966 1,932
Deferred revenue 3,888 3,691
Current obligations under capital leases 1,370 1,181
Deferred tax liability 2,007 -
Income tax payable 1,116 -
------------ ------------
Total current liabilities 25,784 18,654
------------ ------------

OBLIGATIONS UNDER CAPITAL LEASES--Less
current portion 2,797 1,764
OTHER LONG-TERM LIABILITIES 292 117
DEFERRED TAX LIABILITY 1,370 1,449

STOCKHOLDERS' EQUITY:

Common stock 176 173
Deferred compensation (10) (30)
Additional paid-in capital 93,367 91,443
Treasury stock, 965,000 shares at cost in
2005 (8,600) -
Retained earnings (deficit) 8,011 (4,459)
------------ ------------

Total stockholders' equity 92,944 87,127
------------ ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 123,187 $ 109,111
============ ============



INTERSECTIONS INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

Twelve Months Twelve Months
Ended Ended
December 31, December 31,
2005 2004
------------ ------------
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,470 $ 10,945
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 6,457 3,991
Loss on disposal of fixed asset 15 -
Compensation expense related to
warrants and options 20 20
Tax benefit of stock options excised 784 1,655
Increase in allowance for doubtful
accounts 19 -
Non-cash interest expense - 321
Deferred income tax 2,406 6,530
Amortization of deferred subscription
solicitation costs 21,714 21,671
Impairment of software development
costs 1,515 -

Changes in assets and liabilities:
Accounts receivable (4,795) (561)
Prepaid expenses and other current
assets (294) (1,089)
Deferred subscription solicitation
costs (21,347) (21,089)
Other assets (5,807) 92
Accounts payable 183 816
Accrued expenses and other current
liabilities 1,969 (705)
Accrued payroll and employee
benefits 888 (111)
Commissions payable 34 (138)
Deferred revenue 197 (555)
Income tax payable 1,116 -
Other long-term liabilities 41 15
------------ ------------

Net cash provided by operating
activities 17,585 21,808
------------ ------------

NET CASH USED IN INVESTING ACTIVITIES:
Acquisition of property and equipment (10,540) (9,714)
Purchase of ABI - (18,575)
Restricted cash - 140
Proceeds from sale-leaseback 1,243 -
Investments 6,084 (40,171)
------------ ------------

Net cash used in investing
activities (3,213) (68,320)
------------ ------------

NET CASH (USED IN)PROVIDED BY FINANCING
ACTIVITIES:
Issuance of new common stock through IPO - 44,947
Options exercised 1,143 1,798
Repayment of debt assumed in business
acquisition - (1,451)
Repurchase of treasury stock (8,600) -
Capital lease payments (1,387) (1,166)
------------ ------------

Net cash (used in) provided by
financing activities (8,844) 44,128
------------ ------------

INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 5,528 (2,384)
CASH AND CASH EQUIVALENTS--Beginning of
period 12,027 14,411
------------ ------------
CASH AND CASH EQUIVALENTS--End of period $ 17,555 $ 12,027
============ ============



INTERSECTIONS INC.
OTHER DATA
(Unaudited)

Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- -----------------------
(dollars in thousands)

2005 2004 2005 2004
----------- ----------- ----------- -----------

Subscribers at
beginning of period 3,413,299 2,555,017 2,885,223 2,274,605
New subscribers -
indirect 620,776 545,150 2,180,964 1,609,469
New subscribers -
direct 149,173 209,036 700,297 805,217
Cancelled
subscribers within
first 90 days of
subscription 188,217 146,069 845,522 586,680
Cancelled
subscribers after
first 90 days of
subscription 335,056 277,911 1,260,987 1,217,388
----------- ----------- ----------- -----------
Subscribers at end of
period 3,659,975 2,885,223 3,659,975 2,885,223
=========== =========== =========== ===========

Indirect subscribers 67.5% 60.1% 67.5% 60.1%
Direct subscribers 32.5 39.9 32.5 39.9
----------- ----------- ----------- -----------
Subscribers at end of
period 100.0% 100.0% 100.0% 100.0%
=========== =========== =========== ===========

Total revenue (1) $ 43,219 $ 35,934 $ 165,171 $ 152,916
Revenue from
transactional sales (4,014) (1,363) (16,263) (3,093)
Revenue from
lost/stolen credit
card registry (20) (20) (77) (85)
----------- ----------- ----------- -----------
Subscription revenue 39,185 34,551 148,831 149,738
=========== =========== =========== ===========

Marketing and
commissions 11,504 11,656 46,333 66,047
Commissions paid on
transactional sales (21) (27) (105) (759)
Commissions paid on
lost/stolen credit
card registry (6) (2) (36) (9)
----------- ----------- ----------- -----------
Marketing and
commissions associated
with subscription
revenue 11,477 11,627 46,192 65,279
=========== =========== =========== ===========

Subscription revenue,
net of marketing and
commissions associated
with subscription
revenue $ 27,708 $ 22,924 $ 102,639 $ 84,459
=========== =========== =========== ===========

Indirect revenue 51.7% 41.6% 49.0% 40.5%
Direct revenue 48.3 58.4 51.0 59.5
----------- ----------- ----------- -----------
Subscription revenue,
net of marketing and
commissions associated
with subscription
revenue 100.0% 100.0% 100.0% 100.0%
=========== =========== =========== ===========

(1) Total revenue for 2005, including $13.8 million from ABI, was
$165.2 million compared to total revenue for 2004 of $152.9
million. As previously disclosed, the reduction in revenue is
primarily due to a new marketing agreement with one of our clients
which became effective September 1, 2004. Prior to the new
agreement, revenue was recognized on a gross basis in the amount
billed to the subscriber. Pursuant to the new agreement, we record
revenue based on the amount billed to the client not the amount
billed to the subscriber. These revised terms and the
corresponding change in revenue recognition for this agreement
will also reduce our expenses as a percentage of revenue. This
decrease is partially offset by the inclusion of a full year of
revenue from ABI in 2005, versus partial year revenue from ABI as
a result of the purchase on November 12, 2004.