News notes
The research industry remains healthy, with longer-term compound annual growth rates of 4-6 percent, according to ESOMAR’s newly released 2005 Global Market Research Report. The report also highlights the success of newer methodologies such as online, which now represents 20 percent of market research expenditure worldwide. The report reveals that the industry now represents estimated global revenues of $23,290 million with a 7 percent growth rate compared to 2004 (real growth rate adjusted for inflation is 4.3 percent). Asia-Pacific and the new EU member states showed a 7.4 percent real growth rate.
The 15 mature EU markets remain buoyant too, with a 5.4 percent growth rate, one point above the global average. With an estimated revenue of $10,437 million, Europe continues to generate the most market research revenue (45 percent of the total), followed by North America ($8,295 million; 36 percent of total market research revenue).
Europe - along with the Middle East and Africa - is the only area to have experienced a strong real growth in 2005 compared to 2004.
The fastest-growing markets include Latvia (34 percent growth), China (25 percent), Thailand (23 percent), Bulgaria (22 percent) and Malaysia (20 percent). The results also show that amongst the largest markets, France grew the fastest at 3.2 percent followed by Germany (2.8 percent), the U.S. (2.1 percent) and Japan (2 percent). The U.K. remains stable with 0.7 percent growth.
The 2005 Report also demonstrates that online research is now playing a key role in market research around the world, representing 20 percent of expenditure on data collection methods. This figure nearly has nearly doubled from 2004 to 2005 (11 percent in 2004).
At the same time face-to-face interviews have dramatically decreased, now representing 21 percent of data collection compared to 31 percent in 2004. Telephone interviews are currently the most popular data collection method, representing 22 percent (relatively stable compared to 2004 with a two-point decrease). The quantitative/qualitative ratio remains constant with 2004 with roughly a 80/20 split.
Research firm Synovate launched an initiative to promote growth and better align the company with the needs of clients. Called “From Now to Wow,” the program will apply across all business units, support services and operations. Changes include a move from a regional structure to smaller strategic units. The new strategic unit structure has the following leadership: northern Europe will be led by Peter Huijboom, who also remains CEO, global client relationships; southern Europe will be led by Ged Parton, who remains head of the brand and communications practice; United Kingdom will be led by Peter Chopra, who remains CFO; Asia will be led by Tim Balbirnie, currently CEO, Asia Pacific; Australia/New Zealand will be led by Brent Stewart, currently head of Synovate’s Australian operation; central/eastern Europe, and the Middle East will be led by Nicos Rossides, currently CEO, central/eastern Europe, the Middle East and Africa; Africa will be led by Albert McLean, currently COO Africa; North America will be led by CEO Robert Skolnick; Latin America will be led by EVP Ignacio Galceran.
The Response Center, Fort Washington, Pa., has changed its name to TRC.
Greenfield Online, Inc., Wilton, Conn., has begun separating its Ciao Internet survey solutions and comparison shopping business segments from an operational and legal perspective. “This decision is consistent with the steps already taken in the first quarter of this year to separate these business segments from a financial reporting perspective,” said Al Angrisani, president and CEO of Greenfield Online, in a company statement.
The company also announced that Ciao GmbH’s two managing directors, Max Cartellieri and Gunnar Piening, resigned their positions with the company. They are succeeded by Nicolas Metzke, who has been appointed managing director of Ciao. Metzke will head Greenfield Online’s European subsidiary Ciao GmbH through the separation process and the Internet survey solution business going forward.
Vancouver research firm Vision Critical has attained Double-Gold Certified status in the Microsoft Partner Program.
Denmark software firm iMotions – Emotion Technology has exercised an option to bring in two additional angels to its investor group, adding Andy Miller and Joergen Thorball.
Rochester, N.Y.-based Harris Interactive announced a series of actions in its U.K. operations, including the closing of two facilities, a reorganization of several operating and support groups and a small reduction in workforce.
The company closed a facility in Macclesfield and another in Stockport, consolidating those operations into its Hazel Grove location. It plans to sell its Stockport facility no later than June 7, 2007. To increase operating efficiency and create better alignment with its customer base, the company has reorganized its U.K. marketing, health care and human resource teams. Marketing will now be centered at European headquarters in Brentford, where the company will hire new directors of marketing and public relations. The U.K.-based health care division will now be part of the U.K. business and report to George Terhanian, president of Harris Interactive Europe. The U.K. human resources team will now jointly report to Terhanian and Dennis Bhame, corporate executive vice president of human resources. In connection with the facilities consolidation discussed above, the company also anticipated a reduction in its U.K. staff by 10-15 employees by June 30, 2006, which required estimated cash severance charges of between $250,000 and $300,000.
Acquisitions/transactions
Wayne, Pa., employment services firm Kenexa has acquired Minneapolis-based Gantz Wiley Research. Gantz Wiley Research created WorkTrends, a database of employee survey results with comparisons on topics including leadership, employee engagement and customer orientation. Financial details of the transaction were not disclosed.
Chicago-based Information Resources Inc. (IRI) has acquired the assets of Secant Inc., a beverage alcohol consultancy and information provider. Secant principals Elena Amboyan and Anne Carlson have been named senior vice presidents and will join the beer, wine and spirits vertical practice at IRI.
Paris-based Ipsos has signed a letter of intent to acquire a minority stake in the capital of the Tambor Group, a research company working in the Czech and Slovak markets. The agreement will allow Ipsos to increase its shareholding to 66 percent in 2009.
Omaha, Neb., information firm infoUSA Inc. has entered into a definitive merger agreement under which it will acquire Opinion Research Corporation for $12 per share in cash. The total transaction value including the assumption of debt is approximately $134.3 million. The transaction, which is expected to close in the fourth quarter of 2006, is subject to customary closing conditions and the approval of Opinion Research Corporation shareholders. Opinion Research Corporation will remain headquartered in Princeton, N.J., and will continue to operate independently as part of infoUSA.
Dean Moorehouse has purchased Strategic Research Associates (SRA), Spokane, Wash., from KXLY Broadcast Group. Moorehouse has been with SRA since its inception as sales and marketing manager and has assumed the title of president. Strategic Research Associates was formed in 1996 as an independent subsidiary of KXLY Broadcast Group. One of SRA’s founding members, Steven Dean, has agreed to partner with SRA, and will continue to lead research initiatives on behalf of the company.
Seattle research firm Global Market Insite, Inc. (GMI), has closed $35 million in a Series C venture capital financing round led by Technology Crossover Ventures (TCV). Series C co-investors and existing VC investors FTVentures and Voyager Capital are electing to increase their respective stock holdings in GMI in this financing. In addition, GMI announced that Greg Stanger, venture partner at TCV and former chief financial officer of Expedia, will join the company’s board of directors.
London-based TNS has acquired FutureView, a tool which measures and classifies consumers according to how “future influential” they are. An update of the early adoption model, FutureView segmentation questions the extent to which consumers demonstrate elements of new consumerism such as social responsibility and self-expression. FutureView was developed in Australia and New Zealand by Malcolm Law who, as part of the acquisition, has joined TNS’ segmentation and positioning area where he will support the introduction of the methodology.
Subject to approval from Indian authorities, Germany’s GfK Group will acquire 51 percent of India’s Mode Group, which was established in 1981 and has operated in its present form since 2004. The company, which will be called GfK Mode, has branches in 13 Indian cities.
Also subject to approval, GfK will acquire a 66 percent stake in Custom Research China. GfK is planning to increase this to 100 percent in stages by 2014. In future, the company will operate under the name GfK Custom Research Beijing.
Braintree, Mass., research firm Perseus Development Corporation and WebSurveyor, Herndon, Va., have merged. The two entities will be combined under a newly formed holding company funded by Austin Ventures. Dean Wiltse was named chairman and CEO of the combined entity.
Alliances/strategic partnerships
Chicago-based Research International has opened an office in Egypt, appointing Egypt-based Logic Market Research as an associate firm.
Canada-based Techneos Systems Inc. and Spanish firm Trevenque Sistemas have renewed their agreement to provide Techneos Systems’ Entryware survey software to the Spanish market.
Vancouver-based research firm Vision Critical is partnering with Feldman Research Lab, Teaneck, N.J., to allow clients to use each firm’s respective services.
Germany-based firms DAP Systems and the GfK Group, both providers of software to analyze media use in the TV market, have formed an alliance. In 2007, the pc#tv production and evaluation software used by GfK in TV audience research is to be replaced by the new proprietary GfK system Evogenius. The specification for the system was developed in cooperation with AGF and the GfK companies specializing in media research. The main priority is to design a software system which can be used in both the national and international arenas. Like GfK, DAP Systems is a contractual partner of AGF and develops evaluation and planning programs on its behalf for the German TV market. It provides solutions that can be used in sub-areas of the Evogenius system. DAP Systems will develop new applications for the corresponding areas in Evogenius in consultation with GfK.
Association/organization news
Dominique Hanssens, Jim Nyce and Joe Plummer have joined the Boardroom Project, a body of marketing scientists working to establish marketing measurement standards for continuous improvement in financial performance. Hanssens is the Bud Knapp Professor of Marketing at the UCLA Anderson Graduate School of Management and the 2005–07 executive director of the Marketing Science Institute. Nyce is senior vice president, global consumer insights and strategy at Kraft Foods Inc. Plummer is the chief research officer at the Advertising Research Foundation.
Awards/rankings
Research International was cited by Vodafone for the research company’s role in helping Vodafone win first prize in the U.K.-based Marketing Society’s awards for a concept testing system that is designed to deliver better return on investment from the new-product development process. The Marketing Capability prize was awarded to Vodafone for the differentiation potential system (DPS), a global model for testing the business potential of new concepts and for successfully integrating the end-to-end system throughout Vodafone internationally. “Together with Research International and Oxford Strategic Marketing, we created and implemented a rigorous new system for identifying which new products deserve investment and which don’t. The impact is a higher return on our new product development investment and a faster, better product development cycle,” said Gillian George, senior insights manager, Vodafone, in a press release.
A poll in Afghanistan conducted by New York-based Charney Research has won ABC News the inaugural annual award for excellent journalism using polls. The award-winning, two-part series, “ABC News polls in Iraq and Afghanistan,” aired in December 2005. The award, from the University of Iowa School of Journalism and Mass Communication and the Gallup Organization, recognizes the importance of the news media’s use of polls in understanding public opinion and shaping discourse on social and political issues. ABC’s broadcast of the Charney survey “shows how using accurate polls, as a basis of understanding public opinion, can contribute to vital stories that truly make a difference in our world,” said Jim Clifton, chairman and CEO of the Gallup Organization, in a press release. Prior to the ABC poll, Charney had conducted the first national political survey in post-Taliban Afghanistan for the Asia Foundation. Both surveys are available at www.charneyresearch.com.
New accounts/projects
Researcher TNS has renewed its partnership with CNN and Time magazine. Under the terms of the agreement, TNS will deliver insights based on consumer opinion research spanning 12 Asia-Pacific countries.
Wal-Mart Stores Inc. has signed a new agreement designating ACNielsen as its sole provider of consumer panel services. This new agreement complements the Spectra segmentation and targeting applications that ACNielsen already provides to Wal-Mart. Wal-Mart will use the ACNielsen’s Homescan consumer panel to understand shopper segments and use Spectra’s BehaviorScape store-by-store targeting applications.
Redlands, Calif.-based ESRI’s ArcPad mobile GIS platform will be a component of the Field Data Collection Automation (FDCA) project for the 2010 U.S. Census. Harris Corporation, Melbourne, Fla., has been selected by the U.S. Census Bureau as the system integrator and prime contractor for a $600 million, five-year program to develop and implement an automated system for field data collection. The FDCA program will support census field enumerators who will follow up and collect survey data from households that did not return their census forms. The field enumerator will be equipped with GPS-enabled mobile devices, which will include ESRI’s ArcPad software.
Dallas-based Service Broadcasting Corporation has signed a multi-year commitment to use radio audience estimates based on New York-based Arbitron Inc.’s Portable People Meter when Arbitron deploys the audience measurement service in Dallas. Additional firms - Bonneville International Corporation; Emmis Communications Corporation; Greater Media Inc. and Lincoln Financial Media - have entered into multi-year agreements for Portable People Meter radio ratings when the new audience ratings technology is deployed in the 50 markets encompassed in Arbitron’s previously announced PPM rollout plan.
Norway research software company FIRM has renewed an agreement to provide its Confirmit survey, panel and report platform to U.K. research firm Qubiq-Online. Separately, FIRM has signed a similar agreement with resort company Intrawest, which will license the software as an on-demand solution.
The U.K.’s National Foundation for Educational Research (NFER) has selected London-based Pulse Train’s Bellview Scan and Bellview Web software tools to carry out a number of research projects across the education community. Both products will be used to help the NFER gather research data from teachers, pupils and other groups involved in the education system.
Research software firm NEBU has added Johnston, Zabor, McManus Inc., a Durham, N.C., research firm, to its client list.
New companies/new divisions/ relocations/expansions
Lightspeed Research, Basking Ridge, N.J., has opened an office in Tokyo and named Chris Duston vice president of business development in Japan.
Gongos Research has expanded to a 30,000-square-foot building in Auburn Hills, Mich., outfitting 15,000 square feet for immediate use while anticipating further expansion. The new offices house a technology-based infrastructure and a focus group facility. The firm changed its name from Gongos and Associates Inc. to Gongos Research in conjunction with the move.
Millward Brown has opened an office in Geneva, Switzerland. The office will be headed by Sana Carlton, previously global account coordinator based in Millward Brown’s Madrid office and Martine Rebours, TGI director for France. Rebours will take on this additional responsibility while continuing in her current role.
Simmons Market Research has moved its headquarters to the Florida Atlantic University Research and Development Park. The new address is 1501 SW FAU Research Park Blvd., Suite 100, Deerfield Beach, Fla., 33441.
St. Louis-based Maritz Research has opened a new survey center in Saskatoon, Saskatchewan. The center is 12,000 square feet and has 150 stations.
BIGresearch LLC has moved to 450 West Wilson Bridge Rd., Suite 370, Worthington, Ohio, 43085.
London-based Research Now has opened an office in Melbourne office and tapped Brad Wilson to head it.
Gary Mullet Associates Inc. has moved to 302 River Birch Court, Canton, Ga., 30114-5740. Phone 770-479-0540.
New York research firm TNS has opened a client service office in Bellevue, Wash., at 11100 Northeast 8th Street, Suite 770, Bellevue, Wash., 98004. Phone 425-462-6153. TNS has also named Tom Buehrer vice president and senior account director to work with the team in the Bellevue office.
Synovate has opened an office in Hangzhou, China, teaming with former supplier firm Chun Qiu. The Chun Qiu staff will now work for Synovate and the business will become a branch of Synovate China.
Research firm MRT Services Inc. has moved to 3905 Harrison Rd., Suite 500, Loganville, Ga., 30052. Phone 770-554-6775. Fax 770-554-5660.
Company earnings reports
In terms of sales and total income, the second quarter of 2006 was successful for Germany-based GfK Group. In the first six months sales were up 54.6 percent year-on-year to EUR 534.4 million. Adjusted operating income rose 76.3 percent to EUR 63.8 million.
Knowledge Networks, Menlo Park, Calif., reported 27 percent year-over-year revenue growth for the second quarter of 2006, with revenue of $9.2 million dollars for the period. The company continued to deliver positive net income.
Norway-based FIRM reported a second-quarter revenue increase of 31 percent compared to the corresponding quarter of 2005. FIRM achieved revenue of $4.6 million in the second quarter of 2006 compared to $3.5 million in the corresponding quarter of 2005. The cash flow from operations was $1.3 million in the second quarter of 2006.
SPSS Inc., Chicago, announced results for the quarter and six months ended June 30, 2006. Second quarter revenues were a record $63.5 million, an increase of 9 percent from $58.1 million in the second quarter of 2005. New license revenues were $29.3 million, up 20 percent from $24.4 million in the 2005 second quarter. For the six months ended June 30, 2006, revenues totaled $125.7 million, an increase of 9 percent from $115.5 million for the same period in 2005. New license revenues for the first six months of 2006 were $59.2 million, up 17 percent from $50.4 million for the six months ended June 30, 2005.
Diluted earnings per share (EPS) in the 2006 second quarter were $0.12, compared to $0.21 for the same period last year. This decrease was primarily due to a $2.2 million charge related to share-based compensation reflecting the January 1, 2006 adoption of Statement of Financial Accounting Standards (SFAS) 123R.
For the six months ended June 30, 2006, EPS was $0.35, compared with $0.34 in the same period last year. The 2006 period includes a charge of $3.1 million related to share-based compensation reflecting the January 1, 2006 adoption of SFAS 123R. In addition, the effective income tax rate increased to 38 percent in the first six months of 2006 from 34 percent in the same period last year. An increased number of diluted shares further lowered earnings in the 2006 period. As of June 30, 2006, cash was $113.3 million up from $84.4 million as of December 31, 2005 and $54.2 million on June 30, 2005.
Gongos Research, Auburn Hills, Mich., reported 39 percent growth in first-half 2006 revenue relative to last year, moving from $3.8 million in the first half of last year to $5.3 million this year, and projected 31 percent growth in total revenue relative to last year.
For the second quarter 2006, Arbitron Inc., New York, reported revenue of $74.2 million, an increase of 6.2 percent over revenue of $69.8 million during the second quarter of 2005. Planned spending on the Portable People Meter and Project Apollo initiatives and the required expensing of share-based compensation contributed to increased costs and expenses for the second quarter of 21.4 percent, from $55.4 million in 2005 to $67.3 million in 2006. Earnings before interest and income tax expense (EBIT) for the quarter were $11.9 million, a decrease of 35.8 percent over EBIT of $18.6 million during the comparable period last year. Net income for the second quarter decreased by 52.2 percent from $15.4 million in 2005 to $7.4 million in 2006. Net income per share for the second quarter 2006 was $0.24 (diluted) compared with $0.48 (diluted) for the second quarter 2005.
For the six months ended June 30, 2006, revenue was $159.3 million, an increase of 6.9 percent over the same period last year. EBIT was $41.0 million, compared to $51.3 million in 2005. Net income for the six months was $25.5 million or $0.83 per share (diluted), compared with $35.2 million or $1.11 per share (diluted) during the comparable period last year.
At National Research Corporation, Lincoln, Neb., revenues for the second quarter ended June 30, 2006 were $10.7 million compared with revenues of $7.2 million for the same period in 2005. Net income for the quarter was $1.3 million, or $0.19 per basic and diluted share, compared with net income of $925,000, or $0.13 per basic and diluted share, in the prior-year period. Earnings per share for the quarter were negatively impacted $0.02 as a result of the effect of Statement of Financial Accounting Standards (SFAS) No. 123R adopted in the first quarter and would have been $0.21 per share without that effect.
Revenues for the first half of 2006 were $20.1 million compared with revenues of $14.0 million for the same period in 2005. Net income for the six months ended June 30, 2006 was $2.5 million, or $0.37 per basic and diluted share, compared with $1.6 million, or $0.23 per basic and diluted share, in the prior-year period. Earnings per share for the six months ended June 30, 2006 were negatively impacted $.04 as a result of the effect of the company’s adoption of SFAS No. 123R and would have been $0.41 per share without that effect.
Second-quarter revenues at Princeton, N.J.-based Opinion Research Corporation increased to $50 million and income from continuing operations was $777,000 or $0.14 per diluted common share. Consolidated revenues were $50 million in the second quarter of 2006, increasing from $49.0 million in the second quarter of 2005. Social research revenues were $36.6 million, increasing from $36.2 million in the second quarter of 2005. Market research revenues totaled $13.4 million, increasing from $12.8 million in the second quarter of last year. Income from continuing operations was $777,000, as compared to $1.6 million in the second quarter of 2005.
Contributing to the decline in income from continuing operations is expense of $163,000 reflecting the adoption of the Financial Accounting Standards Board Statement 123(R) on share-based payments, interest expense of $700,000 on subordinated debt issued in July 2005, and a higher effective tax rate which reduced income from continuing operations by $124,000.
New York-based NetRatings ’ revenues for the second quarter of 2006 were $19.9 million, a 17 percent increase over revenues of $17.1 million in the second quarter of 2005, and a 9 percent increase over revenues of $18.3 million in the first quarter of 2006. Net income for the second quarter of 2006 was $931,000, or $0.03 per share, on approximately 34.8 million shares. This compares with a net loss of ($2.3 million), or ($0.06) per share, in the second quarter of 2005, on approximately 36 million shares. On an EBITDA basis, the company earned $2.2 million or $0.06 per share during the second quarter of 2006. This compares with an EBITDA loss in the second quarter of 2005 of ($577,000), or ($0.02) per share.
At Greenfield Online, Wilton, Conn., financial results for its second quarter ended June 30, 2006 showed total net revenue was $24.5 million compared with $26.3 million for the prior year period. Total gross profit was $18.9 million or 77.3 percent of revenues for the second quarter of 2006, as compared with $19.1 million or 72.8 percent of revenues in the prior year period. Operating income was $3.7 million for the second quarter of 2006 or 15.1 percent of revenue, as compared to $4.5 million or 17.2 percent of revenue for the prior year period.
Net income for the second quarter of 2006 was $2.3 million, as compared with $19.1 million for the prior year period. Net income in the second quarter of 2005 benefited from a $15.7 million domestic deferred tax asset valuation allowance release related to expected future utilization of tax benefits, primarily relating to net operating loss carryforwards.
Cash flow from operations was $5.1 million for the second quarter of 2006 as compared to $6.7 million for the prior year period.
For the second quarter of 2006, adjusted EBITDA, excluding restructuring charges, was $7.3 million or 29.8 percent of revenues, as compared to $7.6 million or 28.7 percent of revenue for the prior year period.
On a global basis, Internet survey solutions revenue for the second quarter of 2006 was 42 percent full-service and 58 percent sample only. This compares to 47 percent and 53 percent, respectively, for the first quarter of 2006.
In the second quarter of 2006, the firm completed 2,896 projects for 477 clients. This compares to 2,536 projects for 461 clients in the first quarter.
IMS Health, Fairfield, Conn., announced second-quarter 2006 revenue of $486.2 million, up 12 percent on a reported and constant-dollar basis, compared with revenue of $433.3 million for the second quarter of 2005. Second-quarter 2006 diluted earnings per share on an SEC-reported basis was $0.30, compared with $0.41 in the prior year. Excluding the expensing of equity-based compensation, on an adjusted basis, earnings per share was $0.39, a 15 percent increase, compared with $0.34 per share in the same period last year.
Including the expensing of equity-based compensation, adjusted earnings per share for the second quarter was $0.34. Net income on an SEC-reported basis was $62.7 million, compared with $93.2 million in the year-earlier quarter. On an adjusted basis, excluding the expensing of equity-based compensation, net income rose 2 percent to $79.3 million for the 2006 second quarter, compared with net income of $77.8 million in the prior year. Including the expensing of equity-based compensation, adjusted net income for the second quarter of 2006 was $70.9 million, down 9 percent.
Operating income in the second quarter of 2006 was $106.3 million on an SEC-reported basis, up 3 percent, compared with $103.3 million in the year-earlier period. On an adjusted basis, excluding the expensing of equity-based compensation, second-quarter operating income was $124.4 million, a 12 percent increase (11 percent constant dollar), compared with $110.7 million in the year-earlier period. Including the expensing of equity-based compensation, adjusted operating income in the 2006 second quarter was $112.3 million, up 1 percent reported and flat constant dollar, over the prior year.
Adjusted results for the 2006 second quarter exclude certain pre-tax income items totaling $33.7 million, primarily due to a payment received from VNU, N.V. related to the termination of the proposed merger that was announced in November 2005, as well as certain net tax provisions of approximately $41.9 million, including a tax charge of $21.4 million related to a reorganization of several of the company’s subsidiaries. Second-quarter 2005 results on an adjusted basis exclude a one-time tax benefit of $24.3 million related to repatriating $647 million of previously undistributed foreign earnings under the American Jobs Creation Act.
For the first half of 2006, revenues were $932.4 million, up 10 percent (12 percent constant dollar), compared with revenue of $844.3 million for the first half of 2005. Diluted earnings per share on an SEC-reported basis for the first half of 2006 was $0.86, compared with $0.54 in the prior year. Excluding the expensing of equity-based compensation, on an adjusted basis, earnings per share in the 2006 first half was $0.72, a 14 percent increase, compared with $0.63 per share in the same period last year. Including the expensing of equity-based compensation, adjusted earnings per share for the first six months of this year was $0.65, up 3 percent. Net income on an SEC-reported basis for the first half of 2006 was $180.8 million, compared with $123.5 million in the year-earlier period. On an adjusted basis, excluding the expensing of equity-based compensation, net income for the 2006 first half rose 4 percent to $151.4 million, compared with net income of $145.9 million in the same period last year. Including the expensing of equity-based compensation, adjusted net income for the first six months of 2006 was $136.1 million, down 7 percent.
For the first six months of 2006, operating income was $203.1 million on an SEC-reported basis, a 1 percent increase, compared with $200.2 million in the year-earlier period. On an adjusted basis, excluding the expensing of equity-based compensation, operating income for the 2006 first half was $230.8 million, an 11 percent increase (12 percent constant dollar), compared with $207.6 million in the year-earlier period. Including the expensing of equity-based compensation, adjusted operating income in the 2006 first six months was $209.1 million, up 1 percent on a reported basis and 2 percent on a constant-dollar basis over the prior year.
Adjusted results for the 2006 first half exclude certain pre-tax income items totaling $35.2 million primarily from the terminated VNU merger, as well as certain net tax benefits of $9.4 million. First-half 2005 results on an adjusted basis exclude a one-time tax charge of $42.8 million related to repatriating $647 million of previously undistributed foreign earnings under the American Jobs Creation Act.
In the first half of 2006, Paris-based Ipsos generated revenues of EUR 407.7 million, an increase of 26.7 percent. At 8.6 percent, organic growth was stronger than the 7.8 percent reported in the first half of 2005. Changes in the scope of consolidation had a positive impact of 14.1 percent, thanks mainly to the integration of MORI in the U.K. and Ireland, Understanding Unlimited in the U.S. and Camelford Graham in Canada.