SMS, our ninth major Information Services acquisition since 1995, had operations in fields similar to ours, including mortgage credit information, title, appraisal, and escrow and title system software. By integrating these operations, we expanded our customer base and increased our efficiency. The SMS acquisition also brought us the nation's largest mortgage document preparation service business. Previously, First American had no operations in this vital portion of the mortgage process. Joseph R. Reppert, former chairman of SMS, now acts as vice chairman of First American Real Estate Information Services.

    Our joint venture with Experian, which became effective in January of 1998, added the services of the nation's largest provider of real estate-related data to our group. The efficiencies of having immediate access to this supply of raw data -- information we use in many of our operations -- will be enormous.

    Property Financial Appraisal Services (PFS) was also acquired by First American in 1997. The group has been integrated into First American Appraisal Services, a fast-growing division which uses technology and qualified appraisers to provide lenders with property value assessments needed to measure loan risk. Prominent for many years in the New England area, PFS has expanded our appraisal service presence in the Northeast.

    First American Real Estate Information Services' Excelis division completed its conversion of GMAC's $54 billion portfolio onto its system in 1997. Excelis, the nation's only commercially available real-time, on-line loan servicing system, was developed to handle the nation's largest loan portfolios.

    During the second half of the year, First American Real Estate Information Services set out to further strengthen its efficiency and client satisfaction by learning more about its customers' specific needs. The results of a customer survey, conducted by an independent research firm, led First American to structure the delivery of its services in a way that mirrors the way customers access them. To do so, the group has separated its origination services (those services needed to create a mortgage loan) from its servicing or administration services (those needed to administer a loan throughout its term). Streamlining the delivery of our services through groups focused separately on origination and servicing will benefit our customers today and well into the future.

     Another advantage for our customers will come with the full roll-out of RAPID, First American's Real Estate Property Information Delivery system. This sophisticated system is scheduled to come on-line in 1998. RAPID will blend most of the company's individual service delivery systems into one, allowing products such as appraisal, credit services, flood zone determination and tax services to be accessed through a single system. This delivery method's efficiencies will strengthen customer relationships and encourage new business associations.

    First American Real Estate Information Services' pretax profit declined in 1997, ending the year at $45.3 million, 14 percent less than its 1996 figure of $52.6 million. This downturn is attributable to higher overhead costs to integrate the new acquisitions, and the costs of relocating and consolidating certain operations in Dallas, Texas. Overall, the Information Services group excelled throughout 1997. Its credit services and flood zone determination divisions remain the leaders in their fields, and its appraisal, tax service and field services divisions each rank as the nation's second largest. By year's end, the group's operating revenues rose more than 34 percent, from $246.7 million in 1996 to $331.4 million in 1997.