revenues. Gross revenues for 2006 were $6.56 billion, an increase of 15.2% over $5.69 billion in 2005. Gross profits in 2006 were $1.08 billion, an increase of 23.1% over $879.8 million in 2005. This was the result of an increase in Transportation gross profits of 24.4% to $946.0 million, an increase in Sourcing gross profits of 15.7% to $94.2 million, and an increase in Information Services gross profits of 11.5% to $42.4 million.
During 2006, our gross profit margin, or gross profits as a percentage of gross revenues, increased to 16.5% from 15.5% in 2005. Transportation gross profit margin increased to 17.8% in 2006 from 16.3% in 2005. Sourcing gross profit margin decreased to 7.9% in 2006 from 8.2% in 2005. Information Services is a fee-based business which generates 100% gross profit margin.
Transportation gross profits increased 24.4% to $946.0 million in 2006 from $760.3 million in 2005. Transportation revenues are generated through several transportation services, including truck, intermodal, ocean, air, and miscellaneous services.
Truck gross profits, including less-than-truckload (LTL), increased 23.5% to $823.0 million in 2006. This increase was generated by transaction volume growth, increased profit margin, and pricing increases. While demand for truck services increased in 2006 and we experienced volume growth of over 10% for the year in our truck business year-over-year, volume growth slowed as the year progressed. Our margins expanded as slowing demand in the overall truckload market created a looser truck market.
Intermodal gross profits increased 15.2% to $36.2 million from $31.4 million in 2005. This increase was driven by an increase in gross profit margins, offset by a decrease in volume. Our gross profit margin expanded due to rate increases and the elimination of some lower margin business.
In our international forwarding business, ocean gross profits increased 27.3% to $37.2 million in 2006. Air gross profits increased 61.6% to $21.5 million in 2006. During the third quarter of 2005, we acquired two freight forwarding companies based in Europe. In 2006, these acquisitions contributed approximately 45% of our growth in air and 10% of our growth in ocean.
Miscellaneous transportation gross profits consist of customs brokerage fees, transportation management fees, and other miscellaneous transportation related services. The increase of 42.0% to $28.2 million in 2006 was driven by increases in transportation management fees and customs brokerage business.
Sourcing gross profits increased 15.7% to $94.2 million in 2006. In mid-February 2005, we acquired three produce sourcing and distribution companies, collectively named “FoodSource.” Excluding the impacts of this acquisition, our Sourcing gross profits would have increased approximately 9% in 2006. Our Sourcing business is the buying and selling of fresh fruits and vegetables. For several years, we have actively sought to expand our Sourcing customer base, focusing on large retailers, restaurant chains, and foodservice providers. As a result, we continue to see the long-term trend of increases in volume and gross profits in our integrated relationships with these customers, offset by a decline in our business with produce wholesale customers.
Information Services is comprised entirely of revenue generated by our subsidiary, T-Chek Systems. For 2006, Information Services gross profits increased by 11.5% to $42.4 million due to transaction volume growth and an increase in pricing related to certain truck stop services.
selling, general, and administrative eXpenses. Many of our selling, general, and administrative expenses are variable in relation to gross profits. However, we do gain leverage in certain expenses especially when our gross profits grow faster than our long-term growth target of 15%.
Personnel expenses increased by 20.7% to $515.9 million in 2006, and decreased as a percentage of gross profits to 47.7% in 2006 from 48.8% in 2005. Personnel expenses account for nearly 80% of our total selling, general, and administrative expenses. Expenses related to our restricted stock program and various other incentive plans are based on growth in our earnings. Our strong earnings growth during 2006 compared to 2005 resulted in an increase in expense related to some of these plans.
We focus on keeping personnel expenses as variable as possible while looking for opportunities to be more efficient. Gross profits per employee increased 3.6% in 2006 over 2005. This increase was driven primarily by transaction pricing increases.
Other selling, general, and administrative expenses for 2006 were $148.8 million, an increase of 18.0% from $126.1 million in 2005. As a percentage of gross profits, other selling, general, and administrative expenses decreased to 13.7% compared to 14.3% in 2005. We strive to keep our expenses as variable as possible. With our revenue growth in 2006, we did gain leverage in our other selling, general, and administrative expenses.
income from operations. Income from operations increased 28.0% to $417.8 million for 2006. This increase was primarily driven by the growth in our gross profits. Income from operations as a percentage of gross profits was 38.6% and 37.1% for 2006 and 2005.
investment and other income. Investment and other income increased 85.3% to $11.8 million in 2006. Our cash and cash equivalents as of December 31, 2006, increased $118.0 million over the balance as of December 31, 2005, which contributed to our increased investment income. In addition, our portfolio yield also increased due to increases in short-term interest rates.
provision for income taXes. Our effective income tax rate was 37.9% for 2006 and 38.9% for 2005. The decrease in the effective income tax rate is primarily due to the decline in our effective foreign tax rate and an increase in our tax-exempt municipal interest income. The effective income tax rate for both periods is greater than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit.
net income. Net income increased 31.3% to $266.9 million for 2006. Basic net income per share increased 30.0% to $1.56 for 2006. Diluted net income per share increased 31.9% to $1.53 for 2006.
