Interactive Data Reports Third-Quarter 2009 Results

http://www.businesswire.com/news/home/20091029006401/en

Net Income Growth of 17.5% Reflects the Benefit of Prior Cost-Containment
Initiatives Combined with a Lower Effective Tax Rate
BEDFORD, Mass.--(Business Wire)--
Interactive Data Corporation (NYSE: IDC) today reported its financial results
for the third quarter ended September 30, 2009. Interactive Data`s third-quarter
2009 revenue was $192.1 million, an increase of 1.9% from $188.6 million in the
third quarter of 2008. Income from operations in the third quarter of 2009 was
$58.4 million, an 8.8% increase over $53.7 million in the same period one year
ago. Net income attributable to Interactive Data for the third quarter of 2009
was a record $43.1 million, or $0.45 per diluted share, an increase of 17.5%
over net income of $36.7 million, or $0.38 per diluted share, in the third
quarter of 2008.

Ray D`Arcy, Interactive Data`s president and chief executive officer, stated,
"Our third-quarter 2009 financial performance was highlighted by higher income
from operations primarily driven by the combination of actions we took earlier
this year to adjust spending and higher revenue. Our third-quarter 2009 net
income growth of 17.5% reflects higher income from operations and a lower
effective tax rate of 26.6%, which more than offset a significant decrease in
interest income. By comparison with the effective annual tax rate of 34.8% in
the first-half 2009, the reduction in our third-quarter 2009 effective tax rate
contributed over $4.8 million, or approximately $0.05 per diluted share, to our
third-quarter 2009 net income."

Commenting on the Company`s revenue performance, D`Arcy said, "Organic revenue
grew 3.6% in the third quarter of 2009 over the same period last year due to the
resiliency in our fixed income evaluations and reference data product areas, and
a solid performance in Europe. We were also pleased to see lower cancellation
levels across our institutional business compared with first-half 2009 levels.
Although this is encouraging, customers continue to focus on controlling costs,
which we expect will continue to influence near-term usage-related revenue
growth and progress with new sales."

D`Arcy concluded, "With a successful third quarter behind us, we have raised our
guidance for net income to primarily reflect a lower effective annual tax rate
and, to a lesser extent, incremental improvement in the underlying performance
of our business. In addition, we lowered our 2009 capital expenditure plans due
to changes in the timing for various initiatives, including the upgrading and
expansion of our London office and data center. In the context of our full-year
2009 guidance, it is also important to keep in mind that we enjoyed an
exceptionally strong fourth quarter of 2008 that was aided by certain one-time
sales, strong usage-related revenue and other items. Looking ahead, we plan to
remain disciplined with our spending while continuing to direct investment into
high priority areas that we believe are fundamental to driving long-term
success."

Third-Quarter 2009 Effective Tax Rate

* Interactive Data`s third-quarter 2009 effective tax rate of 26.6% declined by
8.2 percentage points from the first-half 2009 effective tax rate of 34.8%. The
decrease was driven by discrete items totaling $6.1 million primarily resulting
from a favorable UK audit settlement for 2005, 2006 and 2007 ($3.0 million),
various state income tax audit settlements ($1.5 million), and the expiration of
the statute of limitations in various U.S. tax jurisdictions which resulted in a
release of tax reserves ($2.0 million). The collective impact of these discrete
items was partially offset by a decrease in income generated in lower tax rate
jurisdictions, a decrease in foreign tax credits and other items.

Segment Reporting, Related Operating Highlights and Revenue by Geography

Institutional Services Segment:

* Interactive Data Pricing and Reference Data reported third-quarter 2009
revenue of $126.7 million, an increase of $7.1 million, or 5.9%, over the prior
year`s third quarter (or an increase of $11.1 million, or 9.3%, before the
effects of foreign exchange). Kler`s Financial Data Service S.r.l. (Kler`s),
which we acquired in August 2008, contributed incremental revenue of $0.9
million in the third quarter of 2009. NTT DATA Financial (NDF), in whom we
acquired an 80% interest in December 2008 and subsequently acquired an
additional 10% interest during the second quarter of 2009, contributed an
incremental $2.2 million to third-quarter 2009 revenue. Third-quarter 2009
organic revenue for this business, which excludes the contributions from Kler`s
and NDF, related intercompany eliminations associated with NDF and the effects
of foreign exchange, increased by $8.0 million, or 6.8%, over the same period
last year primarily as a result of net new business progress in Europe during
the past several quarters and continued expansion of customer relationships in
the U.S. During the third quarter, this business advanced alliances with
specialist firms to provide valuation services for Term Asset-Backed Securities
Loan Facility (TALF) loans and Municipal Auction Rate Securities (ARS) including
Student Loan Auction Rate Securities (SLARS). This business also established an
alliance with Goal Group, a leading UK-based global class actions service
specialist, to provide a comprehensive, outsourced class actions service
designed to support investors and corporations throughout the entire lifecycle
of a securities class action.
* Interactive Data Real-Time Services generated third-quarter 2009 revenue of
$36.2 million, a decrease of $1.9 million, or 5.1%, over the same quarter last
year (or essentially unchanged before the effects of foreign exchange). The
organic revenue performance for this business primarily reflects the impact of
increased cancellations over the past several quarters for its real-time market
data services, offset by continued strong growth in its U.S. Web-based
solutions. In recent months, Interactive Data continued to expand its Web-based
solutions business in the United States, announcing msnbc.com and Scivantage as
new customers.
* Interactive Data Fixed Income Analytics reported revenue for the third quarter
of 2009 of $8.2 million, which was essentially unchanged from last year`s third
quarter. During the third quarter, this business introduced BondEdge Cash Flow
Analyst for Insurance, a new package of capabilities designed to help address
the asset modeling and risk analysis needs of insurance portfolio
asset-liability management.

Active Trader Services Segment:

* eSignal`s third-quarter 2009 revenue of $20.9 million decreased by $1.7
million, or 7.3%, from the third quarter of 2008 (or a decline of $1.3 million,
or 5.9%, before the effects of foreign exchange) due to the decline in the
eSignal direct subscriber base and lower advertising revenue. As of September
30, 2009, eSignal managed approximately 57,200 direct subscription terminals,
which is 1.7% lower than the same period last year and essentially unchanged
from the prior quarter. eSignal`s recent highlights include the continued
enhancement of its offerings and the deployment of customized versions of its
applications by Knowledge to Action, one of the UK`s leading providers of
financial training.

Revenue by Geography:

* Interactive Data`s North American third-quarter 2009 revenue of $133.0 million
was essentially unchanged from the same period last year. Organic revenue for
Interactive Data`s North American business, which excludes eliminations
associated with the Company`s redistribution relationship with NDF in Japan,
grew 1.0% as growth in its evaluations, reference data services and web-based
solutions was largely offset by revenue weakness in its real-time market data
and eSignal product areas. The Company`s third-quarter 2009 revenue in Europe of
$50.7 million was essentially unchanged from last year`s third quarter.
Excluding the effects of foreign exchange and the incremental contribution from
Kler`s, third-quarter 2009 organic revenue in Europe grew 10.5% primarily as a
result of growth within the Company`s evaluations, reference data services and
real-time market data areas. Interactive Data`s Asia-Pacific revenue of $8.4
million in the third quarter of 2009 grew 73.5% from the third quarter of 2008
primarily as a result of the NDF contribution. Excluding the effects of foreign
exchange and the contribution from NDF, Asia-Pacific organic revenue grew 2.2%
during the third quarter of 2009.
* A table comparing revenue by geography, including the impact of foreign
exchange as a percentage of total revenue for the three months and nine months
ended September 30, 2009 and 2008, for each of Interactive Data`s major
geographic regions has been included on page 13 of this press release.

Other Third-Quarter 2009 Financial and Operating Highlights

Effects of Foreign Exchange:

* Interactive Data's third-quarter 2009 revenue was unfavorably impacted by $6.3
million due to the effects of foreign exchange resulting from a weaker US dollar
in comparison with the third quarter of 2008. Third-quarter 2009 revenue before
the effects of foreign exchange grew by $9.8 million, or 5.2%, over the same
period in 2008. Total costs and expenses in the third quarter of 2009 were
favorably impacted by $4.1 million as a result of the effects of foreign
exchange. Third-quarter 2009 total costs and expenses before the effects of
foreign exchange increased by $2.9 million, or 2.1%, over the third quarter of
2008.
* A table comparing the average foreign exchange rates during the three months
and nine months ended September 30, 2009 versus the comparable periods of 2008
in three of the Company`s primary overseas currencies (as measured against the
U.S. dollar) is provided on page 15 of this press release.

Cash Position, Stock Buyback Activities, and Quarterly Cash Dividend:

* As of September 30, 2009, Interactive Data had no outstanding debt and had
cash, cash equivalents and marketable securities of $290.2 million. During the
third quarter of 2009, Interactive Data repurchased 479,500 shares of its common
stock at an average price of $23.63 per share. Entering the fourth quarter of
2009, nearly 2.0 million shares were available for repurchase under the existing
stock buyback program. During the third quarter of 2009, Interactive Data paid
$18.8 million to stockholders in connection with its regular quarterly dividend
of $0.20 per share.

Management Changes:

* On September 16, 2009, Interactive Data announced that Christine A. Sampson,
the Company's vice president of finance and chief accounting officer, began
serving as interim chief financial officer and treasurer as a result of Andrew
J. Hajducky`s resignation as executive vice president, treasurer and chief
financial officer. Interactive Data is in the process of conducting a CFO
search.
* In early October, Interactive Data announced Elizabeth Duggan was promoted to
managing director of the Company`s Evaluations organization. Duggan has held a
variety of management positions at Interactive Data, serving most recently as
chief operating officer, Evaluations since January 2009.

Nine-Month 2009 Results

* For the nine months ended September 30, 2009, Interactive Data reported
revenue of $563.1 million, an increase of $6.7 million, or 1.2%, from $556.4
million in the same period last year. Foreign exchange unfavorably impacted
revenue during the first nine months by $33.2 million and acquisitions
contributed an incremental $12.2 million during that same period. For the first
nine months of 2009, organic revenue, which excludes the effects of foreign
exchange and the net impact of acquisitions, grew by 5.0%. Total costs and
expenses increased $1.9 million, or 0.5%, to $405.8 million during the first
nine months of 2009. Net income attributable to Interactive Data during the
first nine months of 2009 was $108.2 million, or $1.13 per diluted share, versus
$102.5 million, or $1.06 per diluted share, in the comparable period of 2008.
The effective tax rate for the first nine months of 2009 was 31.8% compared with
35.4% in the same period last year.
* Interactive Data`s results for the first nine months of 2009 included a $10.9
million out-of-period accounting adjustment related to the write-down of certain
assets and the accrual of certain liabilities associated with the Company`s
European real-time market data services operation. The out-of-period accounting
adjustment, which occurred in the second quarter of 2009, decreased
second-quarter 2009 revenue by approximately $2.3 million and increased 2009
second-quarter total costs by approximately $8.6 million, which is mostly
related to data acquisition expenses that were not properly recorded in prior
periods, primarily in 2008 and the first quarter of 2009. A table summarizing
the out-of-period accounting adjustment and its allocation to earlier reporting
periods has been included on page 16 of this press release.

2009 Outlook

Market conditions for the balance of 2009 are expected to remain challenging.
Overall spending on market data and related services by customers in the
financial services industry in 2009 is being influenced by various factors
including cost-containment activities, the impact of recent mergers and
acquisitions, and overall economic conditions. Based on these market conditions,
our results to date and anticipated near-term performance, we have updated our
2009 non-GAAP and GAAP outlook as follows:

Non-GAAP:

* 2009 organic revenue growth over 2008 (on a percentage change basis) is now
expected to be roughly 2.0%. This compares with prior organic revenue guidance
that called for the organic revenue growth to be at the low end of the
low-single digit range.
* 2009 organic income from operations growth versus 2008 (on a percentage change
basis) is now expected to be roughly 6.0%. This is at the high end of prior
organic income from operations guidance that called for growth in the mid-single
digit range.

GAAP:

* 2009 revenue is still expected to be roughly flat with 2008, which is
unchanged from the prior quarter`s guidance.

* This forecast still includes an anticipated positive impact of approximately
two percentage points from acquisitions completed in 2008.
* Our prior revenue guidance assumed that 2009 revenue would be negatively
impacted by approximately four percentage points associated with changes in
foreign exchange rates. Our revenue forecast now includes a negative impact of
at least four percentage points associated with changes in foreign exchange
rates as of September 30, 2009.

* 2009 income from operations versus 2008 (on a percentage change basis) is now
expected to be roughly flat. This compares with prior guidance that called for
the decline in 2009 income from operations to be in the low single digit range.

* This forecast still includes an anticipated positive impact of approximately
two percentage points from acquisitions completed in 2008.
* Our prior guidance assumed that changes in foreign exchange rates would
negatively impact 2009 income from operations by more than five percentage
points. This forecast now includes a negative impact of approximately five
percentage points related to changes in foreign exchange rates as of September
30, 2009.

* Our effective 2009 annual tax rate is now expected to be in the range of 33.0%
to 34.0%, versus prior guidance that ranged from 35.0% to 36.0%.
* Due primarily to the change in our effective 2009 annual tax rate, 2009 net
income attributable to Interactive Data versus 2008 (on a percentage change
basis) is now expected to be roughly flat. This compares with prior guidance for
2009 net income to decline in the low-to-mid single digit range.
* 2009 capital expenditures are now expected to be in the range of $49.0 million
to $51.0 million versus our prior capital expenditure guidance of $54.0 million
to $56.0 million.

* This capital expenditure forecast now includes spending of $6.5 million to
$7.0 million for leasehold improvements related to the planned relocation of our
midtown New York office and refurbishment of our London office and data center.
This is lower than the $7.0 million to $8.0 million that was included for these
leasehold improvements in our prior capital expenditures guidance. Due to the
timing of these activities, we now expect that approximately 50% of these
leasehold improvements will be reimbursed by each respective landlord in 2010
versus the prior expectation that 30% of these leasehold improvements would be
reimbursed by each respective landlord in 2009 with an additional 20% reimbursed
in 2010.

Conference Call Information

Interactive Data Corporation's management will conduct a conference call on
Thursday, October 29, 2009 at 5:30 p.m. Eastern Time to discuss the
third-quarter 2009 results, related financial and statistical information, and
additional business matters. The dial-in number for the conference call is (706)
679-4631 and the related access code is 33734970. A live webcast of the
conference call, along with related slides, will be broadcast on the investor
relations section of the Company`s Web site at www.interactivedata.com and
through www.streetevents.com. To listen, please register and download audio
software at the site at least 15 minutes prior to the call. For those who cannot
listen to the live broadcast, a replay of the call will be available from
October 29 at 8:00 p.m. until Thursday, November 5, 2009 at 8:00 p.m., and it
can be accessed by dialing (706) 645-9291 or (800) 642-1687, using access code
33734970. An archived replay of the call, the related slides and other financial
and statistical information presented on the conference call will also be
available on the investor relations section of the Company`s Web site at
www.interactivedata.com after the call is completed. The information on the
Company`s Web site is not incorporated by reference into this press release.

Non-GAAP Information

In an effort to provide investors with additional information regarding our
results on a generally accepted accounting principles (GAAP) basis, we also
disclose the following non-GAAP information, which management believes provides
the following useful information to investors:

* Management refers to growth rates at constant foreign currency exchange rates
so that business results can be viewed without the impact of changing foreign
currency exchange rates, thereby facilitating period-to-period comparisons of
our underlying business. Generally, when the U.S. dollar either strengthens or
weakens against other currencies, the growth at constant currency rates will be
higher or lower than growth reported at actual exchange rates.
* Management includes information regarding organic revenue growth, which
excludes the contribution of businesses recently acquired, related intercompany
eliminations and the effects of foreign currency exchange rates because
management believes that facilitating period-to-period comparisons of our
organic revenue growth on a constant dollar basis better reflects actual
underlying business trends. As part of determining organic growth, management
refers to revenue for our Interactive Data Pricing and Reference Data,
Interactive Data Real-Time Services, Interactive Data Fixed Income Analytics,
and eSignal businesses. Management uses this information for evaluating its
business, and for forecasting and planning purposes. In addition, since we have
historically reported revenue for these businesses to the investment community
as part of our reports on Form 10-K and Form 10-Q, we believe that continuing to
offer such information provides consistency in our financial reporting.
* Management includes information regarding core total costs and expenses which
excludes total costs and expenses associated with businesses recently acquired,
and the effects of foreign exchange because management believes changes in our
core total costs and expenses on a constant dollar basis better reflect actual
trends in the core businesses.
* Management includes information regarding non-GAAP income from operations,
which excludes revenue and costs and expenses associated with recently acquired
businesses, intercompany eliminations and the effects of foreign exchange
because management believes changes in our non-GAAP income from operations on a
constant dollar basis better reflect actual underlying business trends in the
core businesses.

The above measures are non-GAAP financial measures and should not be considered
in isolation from (and are not intended to represent an alternative measure of)
revenue, total costs and expenses, income from operations, net income or cash
flows provided by operating activities, each as determined in accordance with
GAAP. In addition, the above measures may not be comparable to similarly titled
measures reported by other companies.

Forward-looking and Cautionary Statements

This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and federal
securities laws, and is subject to the safe-harbor created by such Act and laws.
Forward-looking statements include all statements that are not historical
statements and include our statements discussing our goals, beliefs, strategies,
objectives, plans, future financial conditions, potential impact of customer
consolidations, future challenges and opportunities. These statements include
those regarding our ability to drive long-term success, that customer continuing
focus on controlling costs will continue to influence near-term usage-related
revenue growth and progress with new sales, that our spending will be
disciplined, that we will continue to make investments in our business and that
those investments will be directed at areas that are fundamental to our
business, and all of the statements appearing under the heading "2009 Outlook."
Our forward-looking statements are subject to known and unknown risks,
uncertainties, assumptions and other factors that may cause actual results to be
materially different from those contemplated by the forward-looking statements.
Such factors include, but are not limited to: (i) the impact of cost-cutting
pressures across the industries we serve, including, without limitation, delayed
sales cycles and further deceleration in usage-related revenue growth; (ii)
consolidation of financial services companies, both within an industry and
across industries, or the failure of financial services firms; (iii) the
intensity of competition from vendors with greater financial resources than ours
and their strategic response to our services and offerings; (iv) the possibility
of a prolonged outage or other major unexpected operational difficulty at any of
our key facilities; (v) our ability to maintain relationships with our key
suppliers and providers of market data; (vi) our ability to maintain our
relationships with service bureaus and custodian banks; (vii) new technologies
that could cause our offerings or services to become less competitive or
obsolete; (viii) we may not be able to develop new or enhanced services or
offerings in a timely manner, or at all, in response to evolving market demands;
(ix) overall economic conditions; (x) a decline in activity levels in the
securities markets; (xi) new legislation or changes in government or
quasi-government rules, regulations, directives or standards may reduce demand
for our service or increase our expenses; (xii) our ability to negotiate and
enter into strategic acquisitions or alliances on favorable terms, if at all, or
to realize the anticipated benefits from any strategic acquisitions or alliances
that we enter into; (xiii) we provide services to financial institutions that
are subject to significant regulatory oversight, and any investigation of us or
our customers relating to our services could be expensive, time consuming and
harm our reputation; (xiv) certain of our subsidiaries are subject to complex
regulations and licensing requirements; (xv) the risks of doing business
internationally, which includes the impact that changes in foreign exchange
rates may have upon our results of operations; (xvi) the timing and magnitude of
discrete items that may impact our effective tax rate in any given reporting
period; (xvii) our ability to attract and retain key personnel; (xviii) the
actual timing of planned capital expenditures and reimbursements from landlords
which may differ from our expectations; and (xix) the ability of our majority
shareholder to exert influence over our affairs, including the ability to
approve or disapprove any corporate actions submitted to a vote of our
stockholders; and other factors identified in our most recent Annual Report on
Form 10-K and Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission. We undertake no obligation to update these forward-looking
statements.

About Interactive Data Corporation

Interactive Data Corporation (NYSE: IDC) is a leading global provider of
financial market data, analytics and related solutions to financial
institutions, active traders and individual investors. The Company's businesses
supply real-time market data, time-sensitive pricing, evaluations and reference
data for millions of securities traded around the world, including hard-to-value
instruments. Many of the world's best-known financial service and software
companies subscribe to the Company's services in support of their trading,
analysis, portfolio management and valuation activities. Interactive Data,
headquartered in Bedford, Mass., has approximately 2,400 employees in offices
located throughout North America, Europe, Asia and Australia. Pearson plc (NYSE:
PSO; LSE: PSON), an international media company, whose businesses include the
Financial Times Group, Pearson Education, and the Penguin Group, is Interactive
Data Corporation's majority stockholder.

For more information about Interactive Data Corporation and its businesses,
please visit www.interactivedata.com.

INTERACTIVE DATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change 2009 2008 Change

REVENUE $ 192,092 $ 188,589 1.9 % $ 563,118 $ 556,449 1.2 %
COSTS AND EXPENSES:
Cost of services 60,347 60,469 -0.2 % 187,176 181,979 2.9 %
Selling, general and administrative 57,387 60,727 -5.5 % 172,918 181,101 -4.5 %
Depreciation 8,283 6,706 23.5 % 22,962 20,016 14.7 %
Amortization 7,644 7,006 9.1 % 22,715 20,761 9.4 %
Total costs and expenses 133,661 134,908 -0.9 % 405,771 403,857 0.5 %

INCOME FROM OPERATIONS 58,431 53,681 8.8 % 157,347 152,592 3.1 %
Interest income 335 1,893 -82.3 % 1,495 6,208 -75.9 %
INCOME BEFORE INCOME TAXES 58,766 55,574 5.7 % 158,842 158,800 0.0 %
Income tax expense 15,636 18,859 -17.1 % 50,485 56,260 -10.3 %
NET INCOME $ 43,130 $ 36,715 17.5 % $ 108,357 $ 102,540 5.7 %
Less: Net income attributable to noncontrolling interest - - - (172 ) - 100.0 %
NET INCOME ATTRIBUTABLE TO INTERACTIVE DATA CORPORATION $ 43,130 $ 36,715 17.5 % $ 108,185 $ 102,540 5.5 %

EARNINGS PER SHARE- INTERACTIVE DATA CORPORATION:
Basic $ 0.46 $ 0.39 17.9 % $ 1.15 $ 1.09 5.5 %
Diluted $ 0.45 $ 0.38 18.4 % $ 1.13 $ 1.06 6.6 %
Cash dividends declared per common share* $ 0.20 $ 0.30 -33.3 % $ 0.40 $ 0.45 -11.1 %
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 93,994 94,002 0.0 % 93,902 94,094 -0.2 %
Diluted 96,047 96,764 -0.7 % 96,122 97,023 -0.9 %

* The payment of certain quarterly cash dividends does not necessarily occur in the quarter in which it was declared.

INTERACTIVE DATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)

September 30, December 31,
2009 2008
ASSETS (Unaudited)
Assets:
Cash and cash equivalents $ 190,459 $ 154,162
Marketable securities 99,766 74,616
Accounts receivable, net 123,848 109,052
Prepaid expenses and other current assets 21,236 16,039
Receivables from affiliates 1,597 -
Deferred income taxes 7,264 6,511
Total current assets 444,170 360,380
Property and equipment, net 112,143 109,210
Goodwill 566,714 550,282
Intangible assets, net 138,409 157,723
Other assets 5,036 4,930
Total Assets $ 1,266,472 $ 1,182,525

LIABILITIES AND EQUITY

Liabilities:
Accounts payable, trade $ 16,020 $ 17,011
Accrued liabilities 70,005 85,088
Payables to affiliates - 47
Income taxes payable 8,015 6,532
Deferred revenue 43,620 34,106
Dividends payable - 18,705
Total current liabilities 137,660 161,489
Income taxes payable 10,718 11,158
Deferred tax liabilities 33,412 39,057
Other liabilities 15,868 10,418
Total Liabilities 197,658 222,122

Equity:
Interactive Data Corporation stockholders' equity:
Preferred stock - -
Common stock 1,042 1,027
Additional paid-in-capital 1,007,278 976,651
Treasury stock, at cost (208,736 ) (190,000 )
Accumulated earnings 265,027 194,733
Accumulated other comprehensive income (loss) 4,203 (22,604 )
Total Interactive Data Corporation stockholders' equity 1,068,814 959,807
Noncontrolling interest - 596
Total Equity 1,068,814 960,403
Total Liabilities and Equity $ 1,266,472 $ 1,182,525

INTERACTIVE DATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

Nine Months Ended
September 30,
(Unaudited)
2009 2008

Cash flows provided by (used in) operating activities:
Net income $ 108,357 $ 102,540
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 45,677 40,777
Amortization of discounts and premiums on marketable securities, net 1,484 456
Deferred income taxes (7,967 ) (66 )
Excess tax benefits from stock-based compensation (2,559 ) (1,978 )
Stock-based compensation 12,709 10,648
Provision for doubtful accounts and sales credits 1,067 705
Loss on dispositions of fixed assets 463 246
Changes in operating assets and liabilities, net (22,748 ) (16,686 )
NET CASH PROVIDED BY OPERATING ACTIVITIES 136,483 136,642

Cash flows provided by (used in) investing activities:
Purchase of fixed assets (25,157 ) (22,629 )
Acquisition of business (3,231 ) (27,338 )
Purchase of marketable securities (200,176 ) (117,552 )
Proceeds from maturities of marketable securities 173,510 136,215
NET CASH USED IN INVESTING ACTIVITIES (55,054 ) (31,304 )

Cash flows provided by (used in) financing activities:
Proceeds from exercise of stock options and employee stock purchase plan 15,936 16,657
Purchase of treasury stock (18,150 ) (44,767 )
Common stock cash dividends paid (56,413 ) (89,542 )
Excess tax benefits from stock-based compensation 2,559 1,978
NET CASH USED IN FINANCING ACTIVITIES (56,068 ) (115,674 )

Effect of change in exchange rates on cash and cash equivalents 10,936 (10,303 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 36,297 (20,639 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 154,162 205,470

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 190,459 $ 184,831

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Revenue Before Effects of Foreign Exchange, Acquisition-Related Revenue
and Intercompany Eliminations Resulting from Acquisitions
(In thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change 2009 2008 Change
Revenue
Institutional Services:
Pricing and Reference Data $ 126,732 $ 119,673 5.9 % $ 371,754 $ 351,298 5.8 %
Real-Time Services 36,233 38,175 -5.1 % 103,992 114,038 -8.8 %
Fixed Income Analytics 8,231 8,188 0.5 % 24,593 24,388 0.8 %
Institutional Services total 171,196 166,036 3.1 % 500,339 489,724 2.2 %

Active Trader Services:
eSignal 20,896 22,553 -7.3 % 62,779 66,725 -5.9 %
Active Trader Services total 20,896 22,553 -7.3 % 62,779 66,725 -5.9 %

Total revenue 192,092 188,589 1.9 % 563,118 556,449 1.2 %

Effects of foreign exchange
Institutional Services:
Pricing and Reference Data 4,064 - - 20,395 - -
Real-Time Services 1,924 - - 10,923 - -
Fixed Income Analytics 11 - - 49 - -
Institutional Services total 5,999 - 31,367 -

Active Trader Services:
eSignal 336 - - 1,794 - -
Active Trader Services total 336 - - 1,794 - -

Total effects of foreign exchange 6,335 - - 33,161 - -

Non-GAAP revenue before effects of foreign exchange 198,427 188,589 5.2 % 596,279 556,449 7.2 %

Acquisition-related revenue
Acquisition-related revenue - Kler's (895 ) - - (5,984 ) - -
Acquisition-related revenue - NTT DATA Financial (3,635 ) - - (9,998 ) - -
Total effects of acquisition-related revenue (4,530 ) - - (15,982 ) - -

Non-GAAP revenue before effects of foreign exchange and acquisition-related revenue 193,897 188,589 2.8 % 580,297 556,449 4.3 %

Intercompany eliminations - NTT DATA Financial - (1,403 ) - - (3,826 ) -

Non-GAAP revenue before above factors* 193,897 187,186 3.6 % 580,297 552,623 5.0 %

* Also referred to in this news release as organic revenue

Interactive Data Pricing and Reference Data Revenue
Before Effects of Foreign Exchange, Acquisition-Related Revenue
and Intercompany Eliminations Resulting from Acquisitions
($ in thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change % 2009 2008 Change %
Interactive Data Pricing and Reference Data revenue $ 126,732 $ 119,673 5.9 % $ 371,754 $ 351,298 5.8 %
Effects of foreign exchange 4,064 - - 20,395 - -
$ 130,796 $ 119,673 9.3 % $ 392,149 $ 351,298 11.6 %
Acquisition-related revenue - Kler's (895 ) - - (5,984 ) - -
Acquisition-related revenue - NTT DATA Financial (3,635 ) - - (9,998 ) - -
Intercompany eliminations - NTT DATA Financial - (1,403 ) - - (3,826 ) -
Non-GAAP revenue before above factors* $ 126,266 $ 118,270 6.8 % $ 376,167 $ 347,472 8.3 %
* Also referred to in this news release as organic revenue

Interactive Data Real-Time Services Revenue

Before Effects of Foreign Exchange

(In thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change % 2009 2008 Change %
Interactive Data Real-Time Services revenue $ 36,233 $ 38,175 -5.1 % $ 103,992 $ 114,038 -8.8 %
Effects of foreign exchange 1,924 - - 10,923 - -
Non-GAAP revenue before effects of foreign exchange* $ 38,157 $ 38,175 0.0 % $ 114,915 $ 114,038 0.8 %
* Also referred to in this news release as organic revenue

Interactive Data Fixed Income Analytics Revenue

Before Effects of Foreign Exchange

(In thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change % 2009 2008 Change %
Interactive Data Fixed Income Analytics revenue $ 8,231 $ 8,188 0.5 % $ 24,593 $ 24,388 0.8 %
Effects of foreign exchange 11 - - 49 - -
Non-GAAP revenue before effects of foreign exchange* $ 8,242 $ 8,188 0.7 % $ 24,642 $ 24,388 1.0 %
* Also referred to in this news release as organic revenue

eSignal Revenue

Before Effects of Foreign Exchange

(In thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change % 2009 2008 Change %
eSignal revenue $ 20,896 $ 22,553 -7.3 % $ 62,779 $ 66,725 -5.9 %
Effects of foreign exchange 336 - - 1,794 - -
Non-GAAP revenue before effects of foreign exchange* $ 21,232 $ 22,553 -5.9 % $ 64,573 $ 66,725 -3.2 %
* Also referred to in this news release as organic revenue

Revenue by Geography Before Effects of Foreign Exchange, Acquisition-Related Revenue
and Related Intercompany Eliminations Resulting from Acquisitions
(In thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change 2009 2008 Change
Revenue by Geography
North America $ 133,034 $ 133,131 -0.1 % $ 397,384 $ 391,360 1.5 %
Europe 50,688 50,635 0.1 % 142,427 151,340 -5.9 %
Asia-Pacific 8,370 4,823 73.5 % 23,307 13,749 69.5 %
Total revenue $ 192,092 $ 188,589 1.9 % $ 563,118 $ 556,449 1.2 %

Three Months Ended Nine Months Ended
September 30, September 30,
Revenue by Geography as a percentage of revenue 2009 2008 Change 2009 2008 Change
North America 69.3 % 70.6 % -1.3 % 70.6 % 70.3 % 0.2 %
Europe 26.4 % 26.8 % -0.5 % 25.3 % 27.2 % -1.9 %
Asia-Pacific 4.4 % 2.6 % 1.8 % 4.1 % 2.5 % 1.7 %
Total revenue 100.0 % 100.0 % 0.0 % 100.0 % 100.0 % 0.0 %

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change 2009 2008 Change
Revenue - North America $ 133,034 $ 133,131 -0.1 % $ 397,384 $ 391,360 1.5 %
Intercompany eliminations - NTT DATA Financial - (1,403 ) - - (3,826 ) -
Non-GAAP revenue before effects of foreign exchange* $ 133,034 $ 131,728 1.0 % $ 397,384 $ 387,534 2.5 %
* Also referred to in this news release as organic revenue

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change 2009 2008 Change
Revenue - Europe $ 50,688 $ 50,635 0.1 % $ 142,427 $ 151,340 -5.9 %
Effects of foreign exchange 6,139 - - 31,372 - -
56,827 50,635 12.2 % 173,799 151,340 14.8 %
Acquisition-related revenue - Kler's (895 ) - - (5,984 ) - -
Non-GAAP revenue before effects of foreign exchange* $ 55,932 $ 50,635 10.5 % $ 167,815 $ 151,340 10.9 %
* Also referred to in this news release as organic revenue

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change 2009 2008 Change
Revenue - Asia Pacific $ 8,370 $ 4,823 73.5 % $ 23,307 $ 13,749 69.5 %
Effects of foreign exchange 196 - - 1,789 - -
8,566 4,823 77.6 % 25,096 13,749 82.5 %
Acquisition-related revenue - NTT DATA Financial (3,635 ) - - (9,998 ) - -
Non-GAAP revenue before effects of foreign exchange* $ 4,931 $ 4,823 2.2 % $ 15,098 $ 13,749 9.8 %
* Also referred to in this news release as organic revenue

Total Costs and Expenses Before Effects of Acquisition-Related

Total Costs and Expenses, and Foreign Exchange

(In thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change 2009 2008 Change

Total costs & expenses $ 133,661 $ 134,908 -0.9 % $ 405,771 $ 403,857 0.5 %

Effects of foreign exchange 4,114 - - 22,727 - -

Total costs & expenses before the effects of foreign exchange 137,775 134,908 2.1 % 428,498 403,857 6.1 %

Effects of foreign exchange primarily related to the revaluation of overseas bank balances 797 1,401 - (1,125 ) 4,829 -

Total costs & expenses before all foreign exchange-related items 138,572 136,309 1.7 % 427,373 408,686 4.6 %

Acquisition-related costs & expenses
Total costs & expenses - NTT DATA Financial (1,861 ) - - (5,073 ) - -
Total costs & expenses - Kler's (479 ) - - (3,219 ) - -
(2,340 ) - - (8,292 ) - -

Non-GAAP total costs & expenses before above factors $ 136,232 $ 136,309 -0.1 % $ 419,081 $ 408,686 2.5 %

Income from Operations* Before Effects of Acquisitions and Foreign Exchange

(In thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 Change 2009 2008 Change

Non-GAAP revenue before above factors $ 193,897 $ 187,186 3.6 % $ 580,297 $ 552,623 5.0 %

Non-GAAP total costs and expenses before above factors 136,232 136,309 -0.1 % 419,081 408,686 2.5 %

Non-GAAP income from operations $ 57,665 $ 50,877 13.3 % $ 161,216 $ 143,937 12.0 %

* Also referred to in this news release as non-GAAP income from operations

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

2009 Outlook

GAAP Revenue to Organic (non-GAAP) Revenue

* 2009 revenue is still expected to be roughly flat with 2008.

* This forecast still includes an anticipated positive impact of approximately
two percentage points from acquisitions completed in 2008.
* Our prior revenue guidance assumed that 2009 revenue would be negatively
impacted by approximately four percentage points associated with changes in
foreign exchange rates. Our revenue forecast now includes a negative impact of
at least four percentage points associated with changes in foreign exchange
rates as of September 30, 2009.

* Excluding the above factors, 2009 organic (non-GAAP) revenue growth over 2008
(on a percentage change basis) is now expected to be roughly 2.0% . This
compares with prior organic revenue guidance that called for growth to be at the
low end of the low-single digit range.

GAAP Income from Operations to Organic (non-GAAP) Income from Operations

* 2009 income from operations versus 2008 (on a percentage change basis) is now
expected to be roughly flat. This compares with prior guidance that called for
the decline in 2009 income from operations to be in the low single digit range.

* This forecast still includes an anticipated positive impact of approximately
two percentage points from acquisitions completed in 2008.
* Our prior income from operations guidance assumed that changes in foreign
exchange rates would negatively impact 2009 income from operations by more than
five percentage points. This forecast now includes a negative impact of
approximately five percentage points related to changes in foreign exchange
rates as of September 30, 2009.

* Excluding the above factors, 2009 organic (non-GAAP) income from operations
growth versus 2008 (on a percentage change basis) is now expected to be roughly
6.0%. This forecast is now is at the high end of prior organic (non-GAAP) income
from operations guidance that called for growth in the mid-single digit range

* It is not yet possible to quantify the magnitude of changes that are likely to
impact organic (non-GAAP) income from operations from the effects of foreign
exchange rate changes primarily related to the revaluation of overseas bank
balances.

SUPPLEMENTARY DATA

Average Foreign Exchange Rates

(1 Local Currency Unit to the U.S. dollar)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 $ Change % Change 2009 2008 $ Change % Change
GBP to USD $ 1.64 $ 1.89 $ (0.25 ) -13.2 % $ 1.54 $ 1.95 $ (0.41 ) -21.0 %

EUR to USD $ 1.43 $ 1.50 $ (0.07 ) -4.7 % $ 1.37 $ 1.52 $ (0.15 ) -9.9 %

AUD to USD $ 0.83 $ 0.89 $ (0.06 ) -6.7 % $ 0.75 $ 0.91 $ (0.16 ) -17.6 %

Out-of-Period Accounting Adjustment*

(In thousands)

Three Months Ended Year Ended Year Ended Year Ended
March 31, 2009 December 31, 2008 December 31, 2007 December 31, 2006 Total

Decrease in Revenue $ 191 $ 1,694 $ 200 $ 209 $ 2,294

Increase in Total Costs and Expenses 1,308 6,554 611 122 8,595

Total $ 1,499 $ 8,248 $ 811 $ 331 $ 10,889

* The out-of-period accounting adjustment detailed above occurred in the second quarter of 2009 and it was related to write down of certain assets and the accrual of certain liabilities
associated with the Company's European real-time market data services operation within the Institutional Services Segment.

Investors:
Andrew Kramer, 781-687-8306
Director of Investor Relations
andrew.kramer@interactivedata.com
or
Media:
Brian Willinsky, 781-687-8291
Manager, Public Relations
brian.willinsky@interactivedata.com

Copyright Business Wire 2009