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Net Revenue of $132.4 million SCOTTSDALE, Ariz., Aug. 9 /PRNewswire-FirstCall/ -- eFunds Corporation (NYSE:EFD), the Company that delivers innovative payment processing and information intelligence solutions, today reported net revenue of $132 million for the quarter ended June 30, 2006. This amount represents an increase of 14% over net revenue of $116 million reported during the second quarter of 2005. Reported operating income was $15 million, or 12% of net revenue, compared to $19 million, or 16% of net revenue, reported in the prior year quarter. The Company's operating income in the second quarter of 2006 reflects a $6 million operating loss by the Prepaid Solutions business that it acquired in July 2005 while the prior year quarterly results include a $2 million benefit from a state business tax refund received during that quarter. Second quarter net income was $10 million, or $0.21 per diluted share, compared to net income of $13 million, or $0.27 per diluted share, reported in the second quarter of 2005. For the six months ended June 30, 2006, the Company reported net revenue of $272 million compared to net revenue of $231 million reported in the first half of 2005. Reported operating income for the first half of 2006 was $30 million, or 11% of net revenue, compared to operating income of $34 million, or 15% of net revenue, reported in same period in the prior year. Net income for the first half of 2006 was $20 million, or $0.43 per diluted share, as compared to net income of $25 million, or $0.51 per diluted share reported in same period of 2005. "During the quarter, our Prepaid Solutions business continued to attract and win new customers while we continued our efforts to integrate that business' operations within eFunds. Our prepaid business exhibits a high level of seasonality due to the impact of holiday gift card sales and we continue to anticipate that this business will make a positive contribution over the second half of the year. We expect that this business will be largely neutral to our consolidated operating income for the entirety of 2006," stated Paul Walsh, Chairman and CEO of eFunds. "Our EFT Processing business reported double digit revenue growth and we continued to capitalize on our international opportunities with new customer wins in Asia and Europe," stated Walsh. During the second quarter of 2006, the Company reclassified its segments to reflect the geographic location of its customers and the ongoing revisions to the Company's organizational structure as part of management's efforts to develop a more customer-focused organization. For customers based in the U.S., the business results have been further segmented into payment and risk management solutions. The Company's prior year results have been re-presented in the new format in the attached schedules. Forward-looking Statements The Company re-affirmed its previously published guidance that 2006 diluted earnings per share will be between $1.15 - $1.25 and reported that it now anticipates that 2006 net revenues will increase 11 - 15 percent over 2005 net revenues. The foregoing expectations reflect the following assumptions: * An effective tax rate of approximately 35% for the balance of 2006; * Cash outlays for capital expenditures and product development activities in 2006 will approximate $40 million, and * The aggregate revenues from the Company's prepaid business in the second half of 2006 should increase over the levels seen in the first six months of this year in a manner generally consistent with historical periods and the cost savings from integration activities related to this business should exceed $4 million over the balance of the year. Conference Call eFunds will hold a one-hour conference call today at 10:00 a.m. EST to discuss the Company's quarterly and year-to-date financial performance. To listen to the conference call, dial 800-399-5351 (International callers dial 706-643-1939). The call will also be broadcast on the Company's Web site at http://www.efunds.com/ under the "Our Company/Investor Relations" tab. Interested parties are encouraged to click on the web cast link 10 to 15 minutes prior to the start of the conference call. Replay Information A replay of the conference call will be available beginning two hours after the call's completion and will play through 11:59 p.m. EDT on Aug. 23, 2006. You may access the replay by dialing 800-642-1687 (international callers dial 706-645-9291) and entering the Conference ID number 3452602. Additionally, a replay of the conference call will be available via the eFunds Web site at http://www.efunds.com/. About eFunds With more than 30 years of payment processing and information intelligence expertise, eFunds delivers flexible, innovative solutions to the world's leading businesses. Leveraging mission-critical business insight, we enable financial services companies, retailers and government organizations to grow their businesses while reducing transaction and infrastructure costs, detecting potential fraud and building long-term customer value. Our flexible delivery model means solutions can be run in-house, outsourced or anything in between, helping customers balance the need for control with operational efficiency and low cost of ownership. From the point of account opening to the settlement of every transaction -- debit, credit, or prepaid -- eFunds helps businesses win more of the right customers, serve them more efficiently and keep them. http://www.efunds.com/ Statements made in this release concerning the Company's or management's intentions, expectations, or predictions about future results or events are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are necessarily subject to risks and uncertainties that could cause actual results to vary from stated expectations and such variations could be material and adverse. Factors that could result in such a variation include, but are not limited to, the inherent unreliability of earnings and revenue growth predictions due to numerous factors, including many beyond the Company's control, potential difficulties, delays and unanticipated expenses inherent in the development and marketing of new products and services, competitive factors, the unpredictability of merger and acquisition activity, and the numerous risks and potential additional costs, disruptions and delays associated with the establishment of new business initiatives. Additional information concerning these and other factors that could cause actual results to differ materially from the Company's current expectations is contained in the Company's Annual Report on Form 10-K for the period ending December 31, 2005 and subsequent Reports on Form 10-Q. EFUNDS CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended June 30, 2006 2005 (in thousands, except per share (revised) amounts) Net revenue $132,397 100.0% $116,294 100.0% Operating expenses Processing, communication and service costs 33,046 25.0% 27,612 23.7% Employee costs 55,699 42.1% 49,868 42.9% Depreciation and amortization 11,854 9.0% 8,077 6.9% Other operating costs 16,615 12.5% 12,229 10.5% Total operating expenses 117,214 88.5% 97,786 84.1% Income from operations 15,183 11.5% 18,508 15.9% Interest expense (1,424) -1.1% (130) -0.1% Other income - net 1,179 0.9% 1,216 1.0% Income before income taxes 14,938 11.3% 19,594 16.8% Provision for income taxes (5,228) -3.9% (6,662) -5.7% Net income $9,710 7.3% $12,932 11.1% Shares outstanding Basic 46,517 45,649 Diluted 47,260 47,095 Earnings per share Basic $0.21 $0.28 Diluted $0.21 $0.27 EFUNDS CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Six Months Ended June 30, 2006 2005 (in thousands, except per (revised) share amounts) Net revenue $272,135 100.0% $230,532 100.0% Operating expenses Processing, communication and service costs 68,339 25.1% 56,515 24.5% Employee costs 114,777 42.2% 100,880 43.8% Depreciation and amortization 23,632 8.7% 16,224 7.0% Other operating costs 35,035 12.9% 23,382 10.1% Total operating expenses 241,783 88.8% 197,001 85.5% Income from operations 30,352 11.2% 33,531 14.5% Interest expense (3,000) -1.1% (251) -0.1% Other income - net 1,986 0.7% 2,812 1.2% Income before income taxes 29,338 10.8% 36,092 15.7% Provision for income taxes (8,968) -3.3% (11,270) -4.9% Net income $20,370 7.5% $24,822 10.8% Shares outstanding Basic 46,332 47,417 Diluted 47,130 48,924 Earnings per share Basic $0.44 $0.52 Diluted $0.43 $0.51 EFUNDS CORPORATION CONSOLIDATED BALANCE SHEETS June 30, December 31, 2006 2005 (in thousands) (Unaudited) (revised) Current assets: Cash and cash equivalents $94,574 $85,987 Restricted cash 26,966 28,183 Settlement assets 14,128 28,438 Accounts receivable - net 96,100 96,115 Deferred income taxes 19,701 27,422 Prepaid expenses and other current assets 21,543 18,341 Total current assets 273,012 284,486 Property and equipment - net 62,604 63,721 Intangibles-net 411,805 398,337 Other non-current assets 13,667 17,638 Total assets $761,088 $764,182 Current liabilities: Accounts payable $17,662 $23,902 Settlement liabilities 14,476 28,519 Accrued liabilities 36,344 56,011 Acquisition Holdbacks 28,677 25,052 Deferred revenue and gains 25,716 23,978 Long-term debt due within one year 4,720 5,030 Total current liabilities 127,595 162,492 Long-term deferred gains 22,858 27,637 Long-term debt 105,275 106,973 Other long-term liabilities 21,090 15,481 Total liabilities 276,818 312,583 Stockholders' equity: Common stock 512 505 Additional paid-in capital 512,030 498,939 Treasury stock at cost (100,000) (100,000) Retained earnings 71,515 51,144 Accumulated other comprehensive income 213 1,011 Stockholders' equity 484,270 451,599 Total liabilities and stockholders' equity $761,088 $764,182 EFUNDS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2006 2005 (in thousands) (revised) Cash flows from operating activities: Net income $20,370 $24,822 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 8,728 6,947 Amortization 14,904 9,277 Stock-based compensation 4,662 4,474 Excess tax benefit from share-based compensation (1,130) (951) Deferred income taxes 12,599 3,657 Other - net 79 (191) Changes in assets and liabilities Restricted cash 2,260 6,715 Accounts receivable (178) (187) Accounts payable (6,232) (5,344) Deferred revenue gains (2,774) (547) Income taxes receivable/payable (13,159) (26,810) Other assets and liabilities (16,021) (16,903) Net cash provided by operating activities 24,108 4,959 Cash flows from investing activities: Capital expenditures (20,983) (11,790) Acquisitions -- (54,598) Purchases of short-term investments -- (98,925) Proceeds from sale of short-term investments -- 187,065 Proceeds from dispositions 2,356 -- Other - net (4,533) (3,258) Net cash (used in) provided by investing activities (23,160) 18,494 Cash flows from financing activities: Purchase of common stock -- (100,000) Issuance of common stock 8,442 8,079 Excess tax benefit from share-based compensation 1,130 951 Payments on long-term debt (1,987) (984) Other 54 -- Net cash provided by (used in) financing activities 7,639 (91,954) Net increase (decrease) in cash and cash equivalents 8,587 (68,501) Cash and cash equivalents at beginning of period 85,987 274,477 Cash and cash equivalents at end of period $94,574 $205,976 EFUNDS CORPORATION SEGMENT SUMMARY DATA (Unaudited) Three Months Ended June 30, Change 2006 2005 $ % (in thousands) (revised) Net revenue: US Payments $68,149 $56,395 $11,754 21% US Risk Management 46,359 48,199 (1,840) -4% International 17,889 11,700 6,189 53% Total net revenue 132,397 116,294 16,103 14% Operating expenses: Processing, employee and other costs - US Payments 59,345 40,644 18,701 46% US Risk Management 27,735 31,488 (3,753) 12% International 16,008 12,572 3,436 27% Total processing, employee and other costs 103,088 84,704 18,384 22% Allocated overhead - US Payments 3,628 3,931 (303) -8% US Risk Management 3,327 3,059 268 9% International 2,190 1,266 924 73% Corporate 4,981 4,826 155 3% Total allocated overhead 14,126 13,082 1,044 8% Income (loss) from operations: US Payments 5,176 11,820 (6,644) -56% US Risk Management 15,297 13,652 1,645 12% International (309) (2,138) 1,829 86% Corporate (4,981) (4,826) (155) -3% Total income from operations $15,183 $18,508 ($3,325) 18% EFUNDS CORPORATION SEGMENT SUMMARY DATA (Unaudited) Six Months Ended June 30, Change 2006 2005 $ % (in thousands) (revised) Net revenue: US Payments $142,788 $111,212 $31,576 28% US Risk Management 96,245 96,709 (464) 0% International 33,102 22,611 10,491 46% Total net revenue 272,135 230,532 41,603 18% Operating expenses: Processing, employee and other costs - US Payments 124,596 82,556 42,040 51% US Risk Management 57,255 62,857 (5,602) -9% International 31,330 23,926 7,404 31% Total processing, employee and other costs 213,181 169,339 43,842 26% Allocated overhead - US Payments 7,555 8,383 (828) 10% US Risk Management 6,643 6,616 27 0% International 4,116 2,458 1,658 67% Corporate 10,288 10,205 83 1% Total allocated overhead 28,602 27,662 940 3% Income (loss) from operations: US Payments 10,637 20,273 (9,636) -48% US Risk Management 32,347 27,236 5,111 19% International (2,344) (3,773) 1,429 38% Corporate (10,288) (10,205) (83) -1% Total income from operations $30,352 $33,531 $(3,179) -9% EFUNDS CORPORATION SUPPLEMENTAL REVENUE DATA (Unaudited) Three Months Ended Six Months Ended June 30, June 30, % % 2006 2005 Change 2006 2005 Change (in millions) US Payments EFT processing $36.2 $30.7 18% $71.1 $59.7 19% Prepaid solutions 17.8 -- * 39.6 -- * Government 10.2 13.1 -22% 20.3 26.4 -23% Software sales and 3.9 12.6 -69% 11.7 25.1 -53% other services $68.1 $56.4 21% $142.7 $111.2 28% US Risk Management Financial institution products $36.7 $34.5 6% $74.7 $67.2 11% Retail products 4.9 5.7 -14% 9.5 10.7 -11% BPO 4.8 8 -40% 12.1 18.8 -36% $46.4 $48.2 -4% $96.3 $96.7 --% International Software sales $9.1 $6.1 49% $15.1 $12.5 21% BPO 7.1 5.5 29% 15 9.9 52% EFT processing 1.7 0.1 * 3 0.2 * $17.9 $11.7 53% $33.1 $22.6 46% EFUNDS CORPORATION CONSOLIDATED QUARTERLY STATEMENT OF OPERATIONS INFORMATION (RESULTS ADJUSTED TO REFLECT THE REVISED SEGMENT PRESENTATION) (Unaudited) 2005 Quarter Ended September December (in thousands) Mar 31 June 30 30 31 Net revenue: US Payments $54,817 $56,395 $72,133 $77,316 US Risk Management 48,510 48,199 47,857 44,035 International 10,911 11,700 13,160 16,675 Total net revenue 114,238 116,294 133,150 138,026 Operating expenses: Processing, employee and other costs - US Payments 41,912 40,644 61,943 62,812 US Risk Management 31,369 31,488 29,240 29,113 International 11,354 12,572 12,946 13,714 Total processing, employee and other costs 84,635 84,704 104,129 105,639 Allocated overhead - US Payments 4,452 3,931 3,694 4,130 US Risk Management 3,557 3,059 3,027 3,278 International 1,192 1,266 1,602 1,885 Corporate 5,379 4,826 5,143 4,859 Total allocated overhead 14,580 13,082 13,466 14,152 Income (loss) from operations: US Payments 8,453 11,820 6,496 10,374 US Risk Management 13,584 13,652 15,590 11,644 International (1,635) (2,138) (1,388) 1,076 Corporate (5,379) (4,826) (5,143) (4,859) Total income from operations $15,023 $18,508 $15,555 $18,235 EFUNDS CORPORATION CONSOLIDATED QUARTERLY STATEMENT OF OPERATIONS INFORMATION (RESULTS ADJUSTED TO REFLECT THE REVISED SEGMENT PRESENTATION) (Unaudited) Three months ended Year ended March 31, (in thousands) 2005 2006 Net revenue: US Payments $260,661 $74,639 US Risk Management 188,601 49,886 International 52,446 15,213 Total net revenue 501,708 139,738 Operating expenses: Processing, employee and other costs - US Payments 207,311 65,251 US Risk Management 121,210 29,520 International 50,586 15,322 Total processing, employee and other costs 379,107 110,093 Allocated overhead - US Payments 16,207 3,927 US Risk Management 12,921 3,316 International 5,945 1,926 Corporate 20,207 5,307 Total allocated overhead 55,280 14,476 Income (loss) from operations: US Payments 37,143 5,461 US Risk Management 54,470 17,050 International (4,085) (2,035) Corporate (20,207) (5,307) Total income from operations $67,321 $15,169 DATASOURCE: eFunds Corporation CONTACT: Helen Johnson, Investor Relations, +1-480-629-7607, or George Gresham, Chief Financial Officer, +1-480-629-7662, both of eFunds Corporation Web site: http://www.efunds.com/

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