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Interactive Data Reports Third-Quarter 2011 Results

(October 27, 2011)

BEDFORD, MA -- (Marketwire) -- 10/27/11 -- Interactive Data Corporation today reported its financial results for the third quarter ended September 30, 2011. Please note that Interactive Data's third-quarter 2010 results detailed below reflect the predecessor period prior to the Company's acquisition (from July 1, 2010 through July 29, 2010) and the successor period following it (from July 30, 2010 through September 30, 2010) on a combined basis. All non-GAAP financial measures with applicable reconciliations, including those for the combined periods, are set forth on the pages following the financial tables of this press release.

Interactive Data's third-quarter 2011 revenue increased 10.1% to a record $217.9 million from $197.9 million in the third quarter of 2010. Third-quarter 2010 revenue was reduced by $2.3 million due to the purchase accounting for the amortization of acquisition-related deferred revenue. Excluding the impact of changes in foreign exchange rates and the reduction in third-quarter 2010 revenue associated with the acquisition-related deferred revenue adjustment, Interactive Data's organic (non-GAAP) revenue grew 6.7% from the third quarter in 2010.

Interactive Data's third-quarter 2011 income from operations was $30.8 million, compared with a loss from operations of $85.9 million in same period one year ago. The third-quarter 2010 loss from operations included merger costs of $100.8 million. Non-GAAP adjusted EBITDA (which excludes items that are either not part of the Company's ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) for the third quarter of 2011 was a Company record $87.4 million. This is 12.7% higher than $77.5 million in the same period one year ago.

"Our third-quarter 2011 results reflect continued progress across our business," stated Mason Slaine, Interactive Data's president and chief executive officer. "Our revenue growth during the third quarter of 2011 was driven primarily by ongoing strength in our Pricing and Reference Data business, and continued expansion of our Real-Time Services business largely resulting from another strong showing in our Interactive Data 7ticks product area. We converted our revenue growth into higher adjusted EBITDA and free cash flow this quarter as we balanced overall operating discipline with accelerated investment in key product and technology initiatives. As we move forward, we are well positioned to continue addressing the evolving needs of our customers worldwide."


Segment Reporting and Related Operating Highlights

Institutional Services Segment:

  • Interactive Data Pricing and Reference Data reported third-quarter 2011 revenue of $141.0 million, a 9.3% increase over the third quarter of 2010. Excluding the effects of foreign exchange and the reduction of $1.5 million in third-quarter 2010 revenue associated with the acquisition-related deferred revenue adjustment, third-quarter 2011 organic (non-GAAP) revenue for this business increased by 6.6% from the same period last year. This business produced a strong quarter of new sales as demand across its global customer base for its evaluated pricing and reference data services remained healthy. During the third quarter of 2011, Interactive Data Pricing and Reference Data added local evaluated pricing resources in Germany and the business also recently announced that it is working with the Financial Industry Regulatory Authority (FINRA) to develop a set of daily reports designed to provide transparency into market activity related to U.S. structured securities.

  • Interactive Data Real-Time Services generated third-quarter 2011 revenue of $48.7 million, which is 19.5% higher than the same quarter last year. Excluding the effects of foreign exchange and the reduction of $0.6 million in third-quarter 2010 revenue associated with the acquisition-related deferred revenue adjustment, third-quarter 2011 organic (non-GAAP) revenue for this business increased 13.2%. The organic revenue growth for this business primarily reflects strong growth in the Interactive Data 7ticks business, as well as expansion within Interactive Data's web-based solutions product area. During the third quarter of 2011, Emmanuel Doe, who most recently served as Global Business Manager for the Thomson Reuters Enterprise segment focusing on the high frequency trading market, was appointed president of Interactive Data's Trading Solutions Group, which includes the Company's real-time data and trading infrastructure services.

  • BondEdge Solutions, which was rebranded in July 2011 and was formerly known as Interactive Data Fixed Income Analytics, reported revenue for the third quarter of 2011 of $8.3 million, which declined by 4.8% from the same quarter last year. Excluding the effects of foreign exchange and the reduction of $0.1 million in third-quarter 2010 revenue associated with the acquisition-related deferred revenue adjustment, third-quarter 2011 organic (non-GAAP) revenue for this business decreased by 5.7%.

Active Trader Services Segment:

  • Interactive Data's Desktop Solutions business reported third-quarter 2011 revenue of $19.8 million, an increase of 2.0% from the same period last year. Excluding the effects of foreign exchange and the reduction of $0.2 in third-quarter 2010 revenue associated with the acquisition-related deferred revenue adjustment, third-quarter 2011 organic revenue was essentially unchanged from the third quarter of 2010 as the impact from lower total subscribers was offset by higher average subscription fees. As of September 30, 2011, Desktop Solutions reported approximately 56,500 total subscribers, a decline of 4.5% from the same period last year with subscriber declines for its various active trader platforms partially offset by strong subscriber growth within the Market-Q platform.

Other Third-Quarter 2011 Financial and Operating Highlights

Effects of Foreign Exchange:

  • Interactive Data's third-quarter 2011 revenue was favorably impacted by $4.1 million due to the effects of foreign exchange primarily resulting from a weaker US dollar against the GBP and the Euro in comparison with the third quarter of 2010. Total costs and expenses in the third quarter of 2011 were $4.0 million higher as a result of the effects of foreign exchange. The net positive effect of foreign exchange on third-quarter 2011 operating income was $0.1 million.

Balance Sheet Highlights:

  • As of September 30, 2011, Interactive Data had cash and cash equivalents of $217.2 million, a $29.2 million increase over second-quarter 2011 levels. The Company's total debt outstanding as of September 30, 2011, was approximately $2.0 billion.

Results for the Nine Months Ended September 30, 2011

  • For the nine months ended September 30, 2011, Interactive Data reported revenue of $645.7 million, an increase of $56.9 million, or 9.7%, from $588.8 million in the same period last year. Excluding the effects of foreign exchange and the reduction of $2.3 million in revenue for the first nine months of 2010 associated with the deferred revenue adjustment, organic revenue grew by 7.2% during the first nine months of 2011.

  • Interactive Data's income from operations for the first nine months of 2011 was $68.5 million, compared with a loss from operations of $5.9 million in the same period one year ago. For the first nine months of 2011, non-GAAP adjusted EBITDA (which excludes items that are not part of the Company's ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) increased by 13.9% to $245.9 million from $215.9 million in the same period one year ago.

Conference Call Information

Interactive Data Corporation will host a conference call to discuss the Company's third-quarter 2011 results on Friday, October 28, 2011 at 8:30 a.m. ET. The dial-in number for the conference call is (785) 424-1057 and the related access code is IDCQ311. For those who cannot listen to this broadcast, a replay of the call will be available from October 28 at 12:00 p.m. until Thursday, November 3, 2011 at 12:00 p.m., and it can be accessed by dialing (402) 530-9025 or (800) 695-1564 (no access code is required).

Non-GAAP Information

In addition to presenting our results in accordance with generally accepted accounting principles (GAAP), we also disclose the following non-GAAP information:

  • Management includes information regarding organic revenue. Organic revenue excludes the effects of foreign currency exchange rates, adjustments related to the amortization of acquisition-related deferred revenue, and, if applicable, the contribution of businesses recently acquired (and related intercompany eliminations as appropriate). Management believes reporting organic revenue facilitates period-to-period comparisons, and provides a better understanding of underlying business trends and our future revenue growth prospects.

  • Management includes organic revenue for our Interactive Data Pricing and Reference Data, Interactive Data Real-Time Services, BondEdge Solutions (formerly Interactive Data Fixed Income Analytics) and Interactive Data Desktop Solutions businesses because management believes this additional level of detail provides further insight into underlying trends and how the individual business areas are performing. 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 earnings before interest, income taxes, depreciation and amortization (EBITDA). We also include information regarding adjusted EBITDA, which we define as earnings before interest, income taxes, depreciation and amortization, stock-based compensation expense, restructuring charges and benefits, adjustments related to the amortization of acquisition-related deferred revenue, and other non-cash, non-operational or non-recurring items. In addition, management also includes information regarding pro forma adjusted EBITDA. We define this metric as earnings, excluding all of the above factors as well as other adjustments permitted under the Company's senior secured credit facilities. Management considers these measures to be important indicators of the Company's operational profitability and cash generation strength and a good measure of the Company's historical operating trend because it eliminates items that are either not part of the Company's ongoing core operations, do not require a cash outlay, or are not otherwise expected to recur in the ordinary course of business. In addition, the Company's pro forma adjusted EBITDA measure is based on the definition of EBITDA set forth in the agreements governing the Company's senior secured credit facilities.

  • Management includes information regarding free cash flow, which we define as adjusted EBITDA less capital expenditures. Management considers free cash flow as another important measure of the Company's cash generation strength that supports the Company's ability to repay its debt obligations and invest in future growth through new business development activities or acquisitions.

  • Management uses these non-GAAP financial measures, in addition to GAAP financial measures, as the basis for measuring the Company's core operating performance and comparing such performance to that of prior periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making, and for forecasting and planning purposes. In addition, management also considers pro forma adjusted EBITDA to be an important indicator which can be used for the purpose of analyzing covenant compliance under the Company's senior secured credit facilities.

  • The non-GAAP financial measures of the Company's results of operations included in this press release should not be considered in isolation from comparable measures determined in accordance with GAAP. The non-GAAP financial measures are not meant to be considered superior to or a substitute for the Company's results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the comparable GAAP financial measures are set forth in the accompanying tables. The non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

Forward-looking and Cautionary Statements

The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties. 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, future challenges and opportunities, including our statements that, as we move forward, we are well positioned to continue addressing the evolving needs of our customers worldwide. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2010, under the caption "Risk Factors," as well as the Company's recent Quarterly Reports on Form 10-Q. The Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q are on file with the Securities and Exchange Commission and available in the "Investors" section of our Website under the heading "SEC Filings." Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: (i) the implementation of strategies designed to improve core revenue and profit growth; (ii) the impact of cost-cutting pressures across the industries we serve; (iii) general worldwide economic conditions and related uncertainties; (iv) consolidation of financial services companies, within and across industries, or the failure of financial institutions; (v) decline in activity levels in the securities markets, weak or declining financial performance of market participants or the failure of market participants; (vi) the intensity of competition we face; (vii) a prolonged outage at one of our data centers or other major disruptions of our computer operations or those of our suppliers; (viii) our ability to maintain relationships with our key suppliers and providers of market data; (ix) our ability to maintain our relationships with service bureaus and custodian banks and our other customers; (x) the need to develop new products and adapt to legal, regulatory, technology or other change; (xi) our cost-savings plans may not be effective or yield the expected efficiencies or may take longer than anticipated; (xii) risks related to our substantial leverage, including our ability to raise additional capital to fund operations or react to changes in the economy or our industry, and our exposure to interest rate risk due to the extent of our variable rate debt (to the extent the risk is not mitigated by our interest rate hedge and cap arrangements that may be in place and as amended from time to time); (xiii) our ability to negotiate and enter into strategic acquisitions or alliances on favorable terms, if at all, (xiv) our ability to realize the anticipated benefits from any strategic acquisitions or alliances that we enter into; (xv) we are subject to regulatory oversight and we provide services to financial institutions that are subject to regulatory oversight; (xvi) certain of our subsidiaries are subject to complex regulations and licensing requirements; (xvii) the risks of doing business internationally; (xviii) intellectual property related risks, including any allegations that we infringe the intellectual property rights of others; and (xix) our ability to attract and retain qualified management and other key personnel. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change and, therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

About Interactive Data Corporation

Interactive Data Corporation is a trusted leader in financial information. Thousands of financial institutions and active traders, as well as hundreds of software and service providers, subscribe to our fixed income evaluations, reference data, real-time market data, trading infrastructure services, fixed income analytics, desktop solutions and web-based solutions. Interactive Data's offerings support clients around the world with mission-critical functions, including portfolio valuation, regulatory compliance, risk management, electronic trading and wealth management. Interactive Data is headquartered in Bedford, Massachusetts and has over 2,500 employees in offices worldwide.

For more information, please visit www.interactivedata.com.

INTERACTIVE DATA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands) Successor Combined Successor Predecessor ----------- ----------- ----------- ----------- Three Three Period from Months Months July 30 Period from Ended Ended through July 1 September September September through 30, 30, 30, July 29, 2011 2010 2010 2010 ----------- ----------- ----------- ----------- REVENUE $ 217,850 $ 197,947 $ 134,261 $ 63,686 COSTS AND EXPENSES: Cost of services 72,081 74,532 47,435 27,097 Selling, general and administrative 63,853 72,433 38,640 33,793 Merger costs - 100,818 63,379 37,439 Depreciation 9,601 9,130 5,926 3,204 Amortization 41,540 26,948 24,280 2,668 ----------- ----------- ----------- ----------- Total costs and expenses 187,075 283,861 179,660 104,201 ----------- ----------- ----------- ----------- INCOME (LOSS) FROM OPERATIONS 30,775 (85,914) (45,399) (40,515) Interest (expense) income, net (38,390) (31,113) (31,269) 156 Other income, net 30 745 703 42 ----------- ----------- ----------- ----------- LOSS BEFORE INCOME TAXES (7,585) (116,282) (75,965) (40,317) Income tax benefit (17,433) (35,812) (27,703) (8,109) ----------- ----------- ----------- ----------- NET INCOME (LOSS) $ 9,848 $ (80,470) $ (48,262) $ (32,208) =========== =========== =========== =========== Successor Combined Successor Predecessor ----------- ----------- ----------- ----------- Period from Nine Months Nine Months July 30 Period from Ended Ended through January 1 September September September through 30, 30, 30, July 29, 2011 2010 2010 2010 ----------- ----------- ----------- ----------- REVENUE $ 645,650 $ 588,805 $ 134,261 $ 454,544 COSTS AND EXPENSES: Cost of services 219,030 209,334 47,435 161,899 Selling, general and administrative 190,089 196,850 38,640 158,210 Merger costs - 116,113 63,379 52,734 Depreciation 30,193 28,430 5,926 22,504 Amortization 137,855 43,998 24,280 19,718 ----------- ----------- ----------- ----------- Total costs and expenses 577,167 594,725 179,660 415,065 ----------- ----------- ----------- ----------- INCOME (LOSS) FROM OPERATIONS 68,483 (5,920) (45,399) 39,479 Interest (expense) income, net (119,025) (30,509) (31,269) 760 Other (expense) income, net (2,708) 952 703 249 Loss on extinguishment of debt (25,450) - - - ----------- ----------- ----------- ----------- (LOSS) INCOME BEFORE INCOME TAXES (78,700) (35,477) (75,965) 40,488 Income tax (benefit) expense (51,295) (9,689) (27,703) 18,014 ----------- ----------- ----------- ----------- NET (LOSS) INCOME $ (27,405) $ (25,788) $ (48,262) $ 22,474 =========== =========== =========== =========== INTERACTIVE DATA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) September 30, December 31, 2011 2010 -------------- -------------- ASSETS (Unaudited) Assets: Cash and cash equivalents $ 217,191 $ 123,704 Accounts receivable, net 119,057 107,067 Due from parent - 7,500 Prepaid expenses and other current assets 31,855 21,079 Income tax receivable 5,940 40,764 Deferred income taxes 13,299 7,574 -------------- -------------- Total current assets 387,342 307,688 Property and equipment, net 110,678 110,386 Goodwill 1,638,068 1,638,268 Intangible assets, net 1,856,742 1,994,461 Deferred financing costs, net 56,863 71,827 Other assets 5,756 11,247 -------------- -------------- Total Assets $ 4,055,449 $ 4,133,877 ============== ============== LIABILITIES AND EQUITY Liabilities: Accounts payable, trade $ 13,751 $ 22,232 Accrued liabilities 86,659 92,020 Borrowings, current 13,450 10,088 Interest payable 12,314 30,647 Income taxes payable 3,970 5,521 Deferred revenue 33,515 24,296 -------------- -------------- Total current liabilities 163,659 184,804 Income taxes payable 11,236 11,314 Deferred tax liabilities 627,389 677,793 Other liabilities 56,127 48,130 Borrowings, net of current portion and original issue discount 1,974,143 1,959,365 -------------- -------------- Total Liabilities 2,832,554 2,881,406 -------------- -------------- Equity: Common stock - - Additional paid-in-capital 1,331,855 1,327,115 Accumulated loss (121,668) (94,263) Accumulated other comprehensive income 12,708 19,619 -------------- -------------- Total Equity 1,222,895 1,252,471 -------------- -------------- Total Liabilities and Equity $ 4,055,449 $ 4,133,877 ============== ============== INTERACTIVE DATA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Successor Combined Successor Predecessor ----------- ----------- ----------- ----------- Period from Nine Months Nine Months July 30 Period from Ended Ended through January 1 September September September through 30, 30, 30, July 29, 2011 2010 2010 2010 ----------- ----------- ----------- ----------- Cash flows provided by (used in) operating activities: Net (loss) income $ (27,405) $ (25,788) $ (48,262) $ 22,474 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 168,048 72,428 30,206 42,222 Amortization of discounts and premiums on marketable securities, net - 766 - 766 Amortization of deferred financing costs and accretion of note discounts 13,386 3,313 3,313 - Deferred income taxes (54,586) (18,586) (25,856) 7,270 Excess tax benefits from stock-based compensation - (3,625) - (3,625) Stock-based compensation 2,740 24,768 783 23,985 Non-cash interest expense - 331 331 - (Recovery) provision for doubtful accounts and sales credits (7) 140 37 103 Loss on dispositions of fixed assets 124 115 1 114 Loss on extinguishment of debt 25,450 - - - Changes in operating assets and liabilities, net (8,576) (69,892) 19,927 (89,819) ----------- ----------- ----------- ----------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 119,174 (16,030) (19,520) 3,490 Cash flows used in investing activities: Purchase of fixed assets (30,803) (34,636) (8,241) (26,395) Business acquisitions, net of acquired cash 19 (32,284) (2,361) (29,923) Acquisition of Interactive Data Corporation and subsidiaries - (3,374,155) (3,374,155) - Purchase of marketable securities - (64,136) - (64,136) Proceeds from maturities of marketable securities - 159,428 - 159,428 ----------- ----------- ----------- ----------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (30,784) (3,345,783) (3,384,757) 38,974 Cash flows provided by financing activities: Proceeds from exercise of stock options and employee stock purchase plan - 28,397 - 28,397 Common stock cash dividends paid - (18,964) - (18,964) Excess tax benefits from stock-based compensation - 3,625 - 3,625 Proceeds from issuance of long-term debt, net of issuance costs 1,358 1,899,670 1,899,670 - Principal payments on long-term debt (6,726) (5,325) (5,325) - Investment by parent company - 1,353,969 1,353,969 - Proceeds from issuance of parent company common stock 11,850 - - - ----------- ----------- ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 6,482 3,261,372 3,248,314 13,058 Effect of change in exchange rates on cash and cash equivalents (1,385) (5,639) 3,109 (8,748) ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 93,487 (106,080) (152,854) 46,774 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 123,704 209,946 256,720 209,946 ----------- ----------- ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 217,191 $ 103,866 $ 103,866 256,720 =========== =========== =========== =========== RECONCILIATION OF NON-GAAP MEASURES Total Organic (Non-GAAP) Revenue (Revenue Before Effects of Deferred Revenue Adjustment and Foreign Exchange) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2011 2010 2011 2010 Successor Combined Change Successor Combined Change --------- -------- ------- --------- -------- ------- Revenue $ 217,850 $197,947 10.1% $ 645,650 $588,805 9.7% Total deferred revenue adjustment - 2,318 - 902 2,318 61.1% --------- -------- ------- --------- -------- ------- Non-GAAP revenue before total deferred revenue adjustment 217,850 200,265 8.8% 646,552 591,123 9.4% Total effects of foreign exchange (4,132) - - (12,668) - - --------- -------- ------- --------- -------- ------- Total organic (non- GAAP) revenue $ 213,718 $200,265 6.7% $ 633,884 $591,123 7.2% ========= ======== ======= ========= ======== ======= Interactive Data Pricing and Reference Data Organic (Non-GAAP) Revenue (Revenue Before Effects of Deferred Revenue Adjustment and Foreign Exchange) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2011 2010 2011 2010 Successor Combined Change Successor Combined Change --------- -------- ------- --------- -------- ------- Interactive Data Pricing and Reference Data revenue $ 141,016 $129,005 9.3% $ 415,738 $380,549 9.2% Effects of deferred revenue adjustment - 1,451 - 569 1,451 -60.8% --------- -------- ------- --------- -------- ------- Non-GAAP revenue before effects of deferred revenue adjustment 141,016 130,456 8.1% 416,307 382,000 9.0% Effects of foreign exchange (1,920) - - (6,593) - - --------- -------- ------- --------- -------- ------- Total organic (non- GAAP) revenue $ 139,096 $130,456 6.6% $ 409,714 $382,000 7.3% ========= ======== ======= ========= ======== ======= Interactive Data Real-Time Services Organic (Non-GAAP) Revenue (Revenue Before Effects of Deferred Revenue Adjustment and Foreign Exchange) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2011 2010 2011 2010 Successor Combined Change Successor Combined Change --------- -------- ------- --------- -------- ------- Interactive Data Real-Time Services revenue $ 48,695 $ 40,760 19.5% $ 144,672 $122,743 17.9% Effects of deferred revenue adjustment - 551 - 113 551 -79.5% --------- -------- ------- --------- -------- ------- Non-GAAP revenue before effects of deferred revenue adjustment 48,695 41,311 17.9% 144,785 123,294 17.4% Effects of foreign exchange (1,948) - - (5,120) - - --------- -------- ------- --------- -------- ------- Total organic (non- GAAP) revenue $ 46,747 $ 41,311 13.2% $ 139,665 $123,294 13.3% ========= ======== ======= ========= ======== ======= BondEdge Solutions (Interactive Data Fixed Income Analytics) Organic (Non-GAAP) Revenue (Revenue Before Effects of Deferred Revenue Adjustment and Foreign Exchange) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2011 2010 2011 2010 Successor Combined Change Successor Combined Change --------- -------- ------- --------- -------- ------- BondEdge Solutions $ 8,310 $ 8,733 -4.8% $ 25,492 $ 25,814 -1.2% Effects of deferred revenue adjustment - 72 - 31 72 -56.9% --------- -------- ------- --------- -------- ------- Non-GAAP revenue before effects of deferred revenue adjustment 8,310 8,805 -5.6% 25,523 25,886 -1.4% Effects of foreign exchange (4) - - (12) - - --------- -------- ------- --------- -------- ------- Total organic (non- GAAP) revenue $ 8,306 $ 8,805 -5.7% $ 25,511 $ 25,886 -1.4% ========= ======== ======= ========= ======== ======= Interactive Data Desktop Solutions (eSignal) Organic (Non-GAAP) Revenue (Revenue Before Effects of Deferred Revenue Adjustment and Foreign Exchange) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2011 2010 2011 2010 Successor Combined Change Successor Combined Change --------- -------- ------- --------- -------- ------- Interactive Data Desktop Solutions (eSignal) revenue $ 19,829 $ 19,449 2.0% $ 59,748 $ 59,699 0.1% Effects of deferred revenue adjustment - 244 - 189 244 -22.5% --------- -------- ------- --------- -------- ------- Non-GAAP revenue before effects of deferred revenue adjustment 19,829 19,693 0.7% 59,937 59,943 0.0% Effects of foreign exchange (260) - - (943) - - --------- -------- ------- --------- -------- ------- Total organic (non- GAAP) revenue $ 19,569 $ 19,693 -0.6% $ 58,994 $ 59,943 -1.6% ========= ======== ======= ========= ======== ======= Non-GAAP Adjusted EBITDA and Non-GAAP Pro Forma Adjusted EBITDA(1) (In thousands, except margin data) Three Months Ended Nine Months Ended September 30, September 30, ------------------------ ------------------------ 2011 2010 2011 2010 Successor Combined Successor Combined ----------- ----------- ----------- ----------- Net Income (Loss) $ 9,848 $ (80,470) $ (27,405) $ (25,788) Interest expense 38,390 31,113 119,025 30,509 Other (income) loss (30) (745) 2,708 (952) Income tax benefit (17,433) (35,812) (51,295) (9,689) Depreciation and amortization 51,141 36,078 168,048 72,428 ----------- ----------- ----------- ----------- EBITDA $ 81,916 $ (49,836) $ 211,081 $ 66,508 Adjustments: Stock-based compensation 952 18,117 2,740 24,768 Merger costs - 100,818 - 116,113 Other non-recurring charges(2) 2,679 6,609 29,335 6,826 Other charges(3) 1,814 1,822 2,727 1,678 ----------- ----------- ----------- ----------- Total Adjustments 5,445 127,366 34,802 149,385 Adjusted EBITDA $ 87,361 $ 77,530 $ 245,883 $ 215,893 Adjusted EBITDA Margin(4) 40.1% 38.7% 38.0% 36.5% Other Adjustments Pro forma cost savings(5) 7,500 7,500 22,500 22,500 ----------- ----------- ----------- ----------- Pro Forma Adjusted EBITDA $ 94,861 $ 85,030 $ 268,383 $ 238,393 =========== =========== =========== =========== Pro Forma Adjusted EBITDA Margin(4) 43.5% 42.5% 41.5% 40.3% (1) Interactive Data's adjusted EBITDA excludes items that are either not part of the Company's ongoing core operations, do not require a cash outlay or are not otherwise expected to recur in the ordinary course. In addition to excluding the aforementioned items, Interactive Data's pro forma adjusted EBITDA also reflects other adjustments permitted under the Company's senior secured credit facilities. The Company's pro forma adjusted EBITDA measure is based on the definition of EBITDA set forth in the agreements governing the Company's senior secured credit facilities. Please note that the sum of certain amounts may not equal the total due to rounding. (2) Other non-recurring charges include the impact of the deferred revenue adjustment, the loss on extinguishment of debt, facility consolidation costs, and severance and retention expenses. (3) Other charges include management fees, earnout-related expense, non-cash foreign exchange expense, acquisition-related adjustments, professional fees related to the registration of the Company's debt securities, and other costs. (4) Adjusted EBITDA margin and pro forma adjusted EBITDA margin are calculated by taking each EBITDA measure and dividing it by non-GAAP revenue (total revenue less deferred revenue adjustment). (5) Pro forma cost savings of up to a maximum of $30 million annually is an adjustment permitted under the Company's credit agreements for activities that may include, but are not limited to, the consolidation of a number of legacy organizational silos, technology platforms and content databases. Trailing Four Quarters and Trailing Twelve Months Quarterly Non-GAAP Adjusted EBITDA and Non-GAAP Pro Forma Adjusted EBITDA(1) (In thousands, except margin data) Trailing 12 Months Three Months Ended Ended December September September 31, March 31, June 30, 30, 30, ---------- ---------- ---------- ---------- ---------- 2010 2011 2011 2011 2011 Successor Successor Successor Successor Successor ---------- ---------- ---------- ---------- ---------- Net (Loss) Income $ (46,001) $ (27,186) $ (10,067) $ 9,848 $ (73,406) Interest expense 47,095 41,897 38,738 38,390 166,120 Other loss (income) 382 351 2,387 (30) 3,090 Income tax benefit (2,648) (23,007) (10,855) (17,433) (53,943) Depreciation and amortization 51,623 57,896 59,011 51,141 219,671 ---------- ---------- ---------- ---------- ---------- EBITDA $ 50,451 $ 49,951 $ 79,214 81,916 $ 261,532 Adjustments: Stock-based compensation (671) 768 1,020 952 2,069 Merger costs 3,879 - - - 3,879 Other non- recurring charges(2) 18,131 25,911 745 2,679 47,466 Other charges(3) 1,678 209 704 1,814 4,405 ---------- ---------- ---------- ---------- ---------- Total Adjustments 23,018 26,888 2,469 5,445 57,820 Adjusted EBITDA $ 73,468 $ 76,839 $ 81,683 87,361 $ 319,352 Adjusted EBITDA Margin(4) 35.1% 36.2% 37.7% 40.1% 37.3% Other Adjustments Pro forma cost savings(5) 7,500 7,500 7,500 7,500 30,000 ---------- ---------- ---------- ---------- ---------- Pro Forma Adjusted EBITDA $ 80,968 $ 84,339 $ 89,183 $ 94,861 $ 349,352 ========== ========== ========== ========== ========== Pro Forma Adjusted EBITDA Margin(4) 38.7% 39.8% 41.2% 43.5% 40.8% (1) Interactive Data's adjusted EBITDA excludes items that are either not part of the Company's ongoing core operations, do not require a cash outlay or are not otherwise expected to recur in the ordinary course. In addition to excluding the aforementioned items, Interactive Data's pro forma adjusted EBITDA also reflects other adjustments permitted under the Company's senior secured credit facilities. The Company's pro forma adjusted EBITDA measure is based on the definition of EBITDA set forth in the agreements governing the Company's senior secured credit facilities. Please note that the sum of certain amounts may not equal the total due to rounding. (2) Other non-recurring charges include the impact of the deferred revenue adjustment, the loss on extinguishment of debt, facility consolidation costs, and severance and retention expenses. (3) Other charges include management fees, earnout-related expense, non-cash foreign exchange expense, acquisition-related adjustments, professional fees related to the registration of the Company's debt securities, and other costs. (4) Adjusted EBITDA margin and pro forma adjusted EBITDA margin are calculated by taking each EBITDA measure and dividing it by non-GAAP revenue (total revenue less deferred revenue adjustment). (5) Pro forma cost savings of up to a maximum of $30 million annually is an adjustment permitted under the Company's credit agreements for activities that may include, but are not limited to, the consolidation of a number of legacy organizational silos, technology platforms and content databases. Non-GAAP Free Cash Flow (In thousands) Three Months Ended Nine Months Ended September 30, September 30, ---------------------------- ---------------------------- 2011 2010 2011 2010 Successor Combined Change Successor Combined Change ----------- --------- ------ ----------- --------- ------ Adjusted EBITDA $ 87,361 $ 77,530 12.7% $ 245,883 $ 215,893 13.9% Capital Expenditures 12,918 12,660 2.0% 30,803 34,636 -11.1% ----------- --------- ------ ----------- --------- ------ Free Cash Flow $ 74,443 $ 64,870 14.8% $ 215,080 $ 181,257 18.7% =========== ========= ====== =========== ========= ====== Pro forma adjusted EBITDA $ 94,861 $ 85,030 11.6% $ 268,383 $ 238,393 12.6% Capital Expenditures 12,918 12,660 2.0% 30,803 34,636 -11.1% ----------- --------- ------ ----------- --------- ------ Free Cash Flow $ 81,943 $ 72,370 13.2% $ 237,580 $ 203,757 16.6% =========== ========= ====== =========== ========= ======

COMPANY CONTACTS
Investors:
Andrew Kramer
781-687-8306
Email Contact

Media:
Brian Willinsky
339-203-0769
Email Contact


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