Interactive Data Corporation (NYSE: IDC) today reported its
financial results for the fourth quarter and full year ended
December 31, 2008. Interactive Data�s fourth-quarter 2008 revenue
increased 6.6% to $194.1 million from $182.1 million in the fourth
quarter of 2007. Income from operations grew 27.0% to $57.1 million
in the fourth quarter of 2008 from $45.0 million in the same period
one year ago. Net income for the fourth quarter of 2008 was $40.1
million, or $0.42 per diluted share, a 25.8% increase over net
income of $31.9 million, or $0.33 per diluted share, in the fourth
quarter of 2007.
�The fourth quarter of 2008 was an excellent finish to another
year in which we posted record results,� stated Stuart Clark,
president and chief executive officer. �Our fourth-quarter 2008
revenue growth was primarily driven by strong new sales throughout
the year, higher usage and the revenue contribution from acquired
businesses, partially offset by the negative impact of foreign
exchange. Excluding the effects of foreign exchange and
acquisitions, our organic revenue growth was 12.7% in the fourth
quarter of 2008 as we saw sustained global demand for our evaluated
pricing, reference data and real-time services. Our net income
growth in the fourth quarter reflects higher income from operations
and a fourth-quarter 2008 effective tax rate that was better than
expected, partially offset by lower interest income.�
Clark continued, �Despite the unprecedented events across the
global financial marketplace that occurred during the fourth
quarter, our business remained resilient. We closed 2008 on a
positive note. New sales in the fourth quarter were strong and
renewal rates across our institutionally oriented business were
approximately 95%. Strategically, we accomplished a number of
important objectives during the year. First, we made progress with
our �One Company� initiatives, which are aimed at enabling us to
operate increasingly as a single global enterprise to maximize our
talent, content, infrastructure and development resources across
the organization. Second, we also extended our geographic footprint
through our acquisitions in Italy and Japan. Third, we continued to
bring new content, capabilities and offerings to the
marketplace.�
Clark added, �We are nearing the completion of our previously
announced CEO succession process, which began in May 2008 when I
informed the Board of Directors of my intention to retire during
2009. In November 2008, the Board selected Ray D�Arcy, president of
our sales and marketing organization, to succeed me as president
and chief executive officer. Since then, Ray and I have been
working together to advance this transition and we now expect that
it will be completed in early March. After Ray becomes president
and chief executive officer, I will stay on in an advisory role
before retiring as planned later this summer.�
Andrew Hajducky, Interactive Data�s executive vice president and
chief financial officer, commented, �We delivered notable growth in
revenue, income from operations and net cash provided by operating
activities during the fourth quarter of 2008. Our operating
performance during the quarter and for the full year reflects
continued positive operating leverage as our revenue growth
continued to outpace operational spending. For the full year, we
returned $156.1 million, or nearly 80% of the net cash provided by
operating activities, to shareholders through our regular quarterly
dividend, special dividend and stock repurchase activity. Even with
these actions and the completion of two acquisitions totaling more
than $56 million, we still moved into 2009 with nearly $230 million
in cash, cash equivalents and marketable securities, and no debt.
This leaves us well positioned to consider a broad range of
opportunities for acquisitions and internal investments that will
help further expand our business and build value in our
enterprise.�
Clark concluded, �Moving forward, we expect to continue
encountering uncertain market conditions in 2009. Customers will
likely be grappling with their need to contain or reduce costs
while adapting to powerful trends affecting their businesses that
may require additional market data or related services. These
trends include heightened scrutiny on their valuation processes,
increased regulation, the proliferation of automated trading
systems and the need to differentiate their wealth management
platforms. We believe that Interactive Data is well positioned to
navigate the current environment by working collaboratively with
customers in mission-critical areas of their operations. We plan to
continue making important investments in our infrastructure and
delivery platforms that we believe will enable us to increase our
market share globally. Although some of our progress in 2009 may be
masked by the anticipated negative impact of foreign exchange based
on the rates at year end 2008, we expect to deliver another year of
solid organic revenue and profit growth.�
Other Fourth-Quarter 2008 and Recent Financial and Operating
Highlights
Effects of Foreign Exchange:
- Interactive Data's
fourth-quarter 2008 revenue was unfavorably impacted by $13.4
million due to the effects of foreign exchange resulting from a
strengthening US dollar late in the year. Fourth-quarter 2008
revenue before the effects of foreign exchange grew by $25.4
million, or 13.9%, over the comparable period in 2007. Total costs
and expenses in the fourth quarter of 2008 were reduced by $9.4
million as a result of the effects of foreign exchange.
Fourth-quarter 2008 total costs and expenses before the effects of
foreign exchange increased by $9.3 million, or 6.8%, over the
fourth quarter of 2007.
Revenue by Geography:
- Interactive Data�s total North
American fourth-quarter 2008 revenue grew 8.2% to $138.2 million
from $127.7 million in the same period last year primarily due to
growth within its Pricing and Reference Data business and ongoing
institutional adoption of its real-time datafeed services. The
Company�s fourth-quarter 2008 revenue in Europe increased 2.0% to
$51.2 million from $50.2 million in the comparable period one year
ago. Excluding the effects of foreign exchange and the contribution
from the Kler�s acquisition, fourth-quarter 2008 organic revenue in
Europe grew 23.2% due primarily to an excellent performance by the
Company�s European Pricing and Reference Data business and the
continued growth of its real-time datafeeds business. Interactive
Data�s Asia-Pacific revenue of $4.7 million in the fourth quarter
of 2008 was up 13.0% from $4.1 million in the fourth quarter of
2007. Excluding the effects of foreign exchange and the
contribution of the NTT DATA Financial (NDF) acquisition in Japan,
Asia-Pacific organic revenue grew 22.7% during the fourth quarter
of 2008 due primarily to higher net new business across the region
and higher usage.
- A table summarizing revenue by
geography, including the impact of foreign exchange as a percentage
of total revenue for the three and twelve months ended December 31,
2008, for each major geographic region in which Interactive Data
has operations has been included on page 13 of this press
release.
Institutional Services Segment:
- Interactive Data Pricing and
Reference Data reported fourth-quarter 2008 revenue of $124.5
million, a 9.0% increase over the prior year�s fourth quarter (or
an increase of 16.0% before the effects of foreign exchange).
Kler�s Financial Data Service S.r.l. (Kler�s), a leading Italian
provider of reference data acquired by Interactive Data in August
2008, contributed revenue of $1.8 million in the fourth quarter of
2008. An important highlight during the quarter was Interactive
Data�s acquisition of an 80% majority interest in NDF, a leading
provider of securities pricing, reference data and related services
to most of the major financial institutions in Japan. This business
contributed $0.5 million in fourth-quarter 2008 revenue. Excluding
the contributions from Kler�s and NDF, and the effects of foreign
exchange, fourth-quarter 2008 revenue for this business increased
14.0% over the same period last year primarily as a result of
expanding business with existing customers in both North America
and Europe, and higher usage. During the past several months, this
business added key executives to its reference data organization,
began offering additional informational resources to complement its
fixed income evaluations services, and appointed Liz Duggan as
chief operating officer for Evaluation Services.
- Interactive Data Real-Time
Services generated fourth-quarter 2008 revenue of $39.0 million, an
increase of 3.7% over the same quarter last year (or an increase of
16.2% before the effects of foreign exchange). The revenue increase
was driven by strong growth in the real-time datafeeds business and
continued expansion of the Managed Solutions business in the United
States. In recent months, Interactive Data Real-Time Services added
a number of new market sources including Pure Trading of Canada,
BATS Trading, the Dubai Financial Market and the Dubai Gold &
Commodities Exchange. The Managed Solutions business announced that
it had doubled the number of clients in the United States during
the past year to 80.
- Interactive Data Fixed Income
Analytics reported revenue for the fourth quarter of 2008 of $8.5
million, a 4.0% increase from last year�s fourth quarter (or an
increase of 4.3% before the effects of foreign exchange). New sales
were partially offset by the impact of cancellations primarily
caused by client consolidation activities.
Active Trader Services Segment:
- eSignal�s fourth-quarter 2008
revenue of $22.2 million was essentially unchanged from the same
quarter last year (or an increase of 3.0% before the effects of
foreign exchange) as higher average net subscription fees were
offset by a decline in the number of direct subscription terminals
to under 55,000. In addition, the number of direct subscription
terminals also reflects the reclassification of certain product
sales that had been inadvertently included as direct terminal
subscriptions in prior quarters. This reclassification had no
effect upon revenue in any period. An updated three-year quarterly
subscription history is provided on page 15 of this news release.
During the fourth quarter, eSignal introduced new offerings for the
agriculture market, launched an end-of-day charting application and
enhanced its FutureSource and eSignal workstations.
Full-Year 2008 Results
- For the full year ended December
31, 2008, Interactive Data reported revenue of $750.5 million, an
increase of $60.9 million, or 8.8%, from $689.6 million in 2007.
Foreign exchange reduced full-year 2008 revenue by $9.3 million and
acquisitions contributed a net of $6.6 million to full-year 2008
revenue. Excluding the effects of foreign exchange and the net
impact of acquisitions, 2008 organic revenue grew by 9.2%. Total
costs and expenses increased $26.9 million, or 5.2%, to $540.9
million in 2008. Net income in 2008 increased $16.7 million, or
13.2%, to $142.6 million, or $1.48 per diluted share, from $126.0
million, or $1.30 per diluted share, in 2007. The effective tax
rate for 2008 was 34.3% compared with 31.8% in 2007. The increase
of 2.5 percentage points from 2007 primarily reflects the impact of
various discrete tax items during 2007 such as a favorable change
in German tax rates and the impact of an R&D tax credit
initiative from 2006 that was applied to the 2007 rate.
Cash Position, Stock Buyback Activities, and Quarterly Cash
Dividend:
- As of December 31, 2008,
Interactive Data had no outstanding debt and had cash, cash
equivalents and marketable securities of $228.8 million. During the
fourth quarter of 2008, Interactive Data spent $7.7 million to
repurchase 363,500 shares of common stock at an average purchase
price of $21.26 per share as part of its existing stock buyback
program. Entering the first quarter of 2009, nearly 2.8 million
shares remained available for repurchase under the existing stock
buyback program. During the fourth quarter of 2008, Interactive
Data paid $14.1 million to stockholders in connection with its
regular quarterly dividend of $0.15 per share to stockholders. On
December 5, 2008, Interactive Data announced that its Board of
Directors has authorized a 33.3% increase in the Company's regular
quarterly dividend to $0.20 per share, commencing with the dividend
to be paid on March 31, 2009 to all shareholders of record at the
close of business on March 2, 2009.
Leadership Succession:
- As part of the previously
announced CEO succession process, Raymond L. D'Arcy, president of
sales and marketing for Interactive Data, will succeed Stuart J.
Clark as the Company's president and chief executive officer in
early March. Following this transition, Mr. Clark will serve as an
advisor to the Company before retiring as planned later this
summer.
- In January 2009, Interactive
Data announced that Cort J. Williams will become president of
Interactive Data's institutional sales organization when Mr. D�Arcy
becomes the Company�s president and chief executive officer.
Acquisition of Majority Interest in NTT DATA Financial
Corporation:
- In December 2008, Interactive
Data acquired a majority interest in NDF. Interactive Data paid
approximately 2.4 billion yen (or approximately U.S. $26.7 million
based on currency exchange rate at the date of acquisition) in cash
to acquire 80% of NDF, which was offset by cash acquired of 938.4
million yen (or U.S. $10.4 million based on the currency exchange
rate at the date of acquisition). Of the 80% interest, 64% was
purchased from NTT DATA Corporation and 16% from certain minority
shareholders. Interactive Data is working with NTT DATA Corporation
to provide for a smooth transition of the business in Japan and to
acquire the remaining equity of NDF over the coming years.
2009 Outlook
Market conditions in 2009 will remain uncertain. We anticipate
that overall spending on market data and related services by
customers in the financial services industry in 2009 may be
influenced by various factors including delayed sales cycles,
cost-containment activities, the impact of recent mergers and
acquisitions, and overall economic conditions. With this as
background, we are taking a cautious approach to our outlook for
2009, which is as follows:
Non-GAAP:
- 2009 organic revenue growth over
2008 (on a percentage change basis) is expected to be in the
mid-single digit range.
- 2009 organic income from
operations growth versus 2008 (on a percentage change basis) is
expected to be in the mid-single digit range.
GAAP:
- 2009 revenue growth over 2008
(on a percentage change basis) is expected to be in the low single
digit range.
- This forecast includes an
anticipated positive impact of approximately two percentage points
from acquisitions completed in 2008.
- This forecast includes a
negative impact of at least five percentage points associated with
changes in foreign exchange rates based on 2008 year-end
rates.
- 2009 income from operations
versus 2008 (on a percentage change basis) is expected to range
from roughly flat to a low single digit decline.
- This forecast includes an
anticipated positive impact of approximately two percentage points
from acquisitions completed in 2008.
- This forecast includes a
negative impact of approximately five percentage points associated
with changes in foreign exchange rates based on 2008 year-end
rates.
- The effective 2009 annual tax
rate is expected to be in the range of 35.0% to 36.0%.
- As a result of the anticipated
impact from foreign exchange, expected lower interest income and
the anticipated increase in the 2009 effective annual tax rate,
2009 net income versus 2008 (on a percentage change basis) is
expected to decline in the low single digit range.
- 2009 capital expenditures are
expected in the range of $56.0 million to $58.0 million.
- This forecast includes
expenditures of $8.0 million to $9.0 million for leasehold
improvements related to the planned relocation of our midtown New
York office and the refurbishment of our European headquarters in
London.
- We expect that 50% of these
leasehold improvements will be reimbursed by landlords during the
year.
Conference Call Information
Interactive Data Corporation's management will conduct a
conference call on Thursday, February 19, 2009 at 11:00 a.m.
Eastern Time to discuss the fourth-quarter and full-year 2008
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 81293086. 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 February 19 at 2:00 p.m. until Thursday,
March 5, 2009 at 2:00 p.m., and it can be accessed by dialing (706)
645-9291 or (800) 642-1687, using access code 81293086. A 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 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 such 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 core operating profit, 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 core operating profit on
a constant dollar basis better reflect actual 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, earnings 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 (a) our expectation that we will continue to encounter
uncertain market conditions with customers likely grappling to
contain or reduce costs while adapting to power trends that may
require additional market data or related services, (b) our belief
that Interactive Data is well positioned to navigate the current
environment by working collaboratively with customers in
mission-critical areas of their operations, (c) our expectation
that we will deliver another year of solid organic revenue and
profit growth, (d) our plans to continue making important
investments in our infrastructure and delivery platforms that we
believe will enable us to increase our market share globally, (e)
our belief that some of our 2009 progress may be masked by
anticipated negative impact of foreign exchange based on rates at
2008 year end, and (f) our 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; (ii) consolidation of
financial services companies, both within an industry and across
industries, or the failure of financial services firms; (iii) a
decline in activity levels in the securities markets; (iv) the
intensity of competition from vendors with greater financial
resources than ours and their strategic response to our services
and offerings; (v) the possibility of a prolonged outage or other
major unexpected operational difficulty at any of our key
facilities; (vi) our ability to maintain relationships with our key
suppliers and providers of market data; (vii) our ability to
maintain our relationships with service bureaus and custodian
banks; (viii) new offerings by competitors or new technologies that
could cause our offerings or services to become less competitive or
obsolete, or we may not be able to develop new or enhanced services
or offerings; (ix) new legislation or changes in government or
quasi-government rules, regulations, directives or standards may
reduce demand for our service or increase our expenses; (x) 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; (xi) 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; (xii) certain of our subsidiaries are subject to
complex regulations and licensing requirements; (xiii) the risks of
doing business internationally; (xiv) our ability to attract and
retain key personnel; and (xv) 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 services
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. Through its businesses, Interactive Data Pricing and
Reference Data, Interactive Data Real-Time Services, Interactive
Data Fixed Income Analytics, and eSignal, the Company has
approximately 2,400 employees in offices located throughout North
America, Europe, Asia and Australia. The Company is headquartered
in Bedford, Mass. 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 Twelve Months Ended
December 31, December 31, �
2008 � � �
2007 �
Change �
2008 � � �
2007 �
Change � � � REVENUE $ 194,092 $ 182,080 6.6 % $ 750,541 $
689,610 8.8 % � COSTS & EXPENSES Cost of services* 59,901
59,259 1.1 % 241,880 225,137 7.4 % Selling, general &
administrative* 63,147 64,747 -2.5 % 244,248 239,370 2.0 %
Depreciation 7,028 6,402 9.8 % 27,044 23,110 17.0 % Amortization �
6,925 � � � 6,708 � 3.2 % � 27,686 � � � 26,373 � 5.0 % Total costs
& expenses � 137,001 � � � 137,116 � -0.1 % � 540,858 � � �
513,990 � 5.2 % � INCOME FROM OPERATIONS 57,091 44,964 27.0 %
209,683 175,620 19.4 % � Interest income � 1,360 � � � 2,693 �
-49.5 % � 7,568 � � � 9,025 � -16.1 % INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 58,451 47,657 22.6 % 217,251 184,645 17.7 %
Income tax expense � 18,322 � � � 15,773 � 16.2 % � 74,582 � � �
58,662 � 27.1 % NET INCOME BEFORE MINORITY INTEREST $ 40,129 $
31,884 25.9 % $ 142,669 $ 125,983 13.2 % Minority interest, net of
taxes � (21 ) � � - � - � � (21 ) � � - � - � NET INCOME $ 40,108 $
31,884 25.8 % $ 142,648 $ 125,983 13.2 % � NET INCOME PER SHARE:
Basic $ 0.43 $ 0.34 26.5 % $ 1.52 $ 1.34 13.4 % Diluted $ 0.42 $
0.33 27.3 % $ 1.48 $ 1.30 13.8 % Cash dividends declared per common
share** $ 0.20 $ 0.775 -74.2 % $ 0.65 $ 1.15 -43.5 % � WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING: Basic 93,654 94,233 -0.6 %
93,984 94,038 -0.1 % Diluted 95,627 97,563 -2.0 % 96,674 97,060
-0.4 % � * Certain prior year amounts have been reclassified to
conform with the current year�s presentation. �
** During the first quarter of
2008, Interactive Data paid a special dividend of $0.50 per common
share and a regular quarterly dividend of $0.15 per common share.
Both dividends were declared in December 2007. In addition, in
November 2007, a regular quarterly dividend of $0.125 per common
share was declared, which was paid in December 2007. During the
third quarter of 2008, Interactive Data declared two regular
quarterly dividends of $0.15 per common share, one of which was
paid during the third quarter of 2008 and the other was paid during
the fourth quarter of 2008. A regular quarterly dividend of $0.20
per common share was declared during the fourth quarter of 2008,
which will be paid on March 31, 2009 to all shareholders of record
at the close of business on March 2, 2009.
INTERACTIVE DATA CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands)
� �
December 31, December 31, 2008 � �
2007 �
ASSETS (Unaudited) �
Current
Assets: Cash and cash equivalents $ 154,162 $ 205,470
Marketable securities 74,616 73,465 Accounts receivable, net
109,052 112,432 Prepaid expenses and other current assets 16,039
18,523 Deferred income taxes � 6,511 � � � 5,276 � Total current
assets � 360,380 � � � 415,166 � Property and equipment, net
109,210 93,832 Goodwill 550,282 554,842 Other intangible assets,
net 157,723 159,869 Other assets � 4,930 � � � 4,517 � Total Assets
$ 1,182,525 � � $ 1,228,226 � �
LIABILITIES AND STOCKHOLDERS'
EQUITY �
Current Liabilities: Accounts payable, trade $
17,011 $ 24,405 Accrued liabilities 85,088 84,706 Payable to
affiliates 47 732 Income taxes payable 6,532 16,065 Deferred
revenue 34,106 30,524 Dividends payable � 18,705 � � � 61,331 �
Total current liabilities � 161,489 � � � 217,763 � Income taxes
payable 11,158 7,667 Deferred tax liabilities 39,057 29,785 Other
liabilities � 10,418 � � � 9,487 � Total Liabilities � 222,122 � �
� 264,702 � � Minority interests 596 - �
Stockholders'
Equity: Preferred stock - - Common stock 1,027 1,015 Additional
paid-in capital 976,651 941,265 Treasury stock, at cost (190,000 )
(137,506 ) Accumulated earnings 194,733 113,595 Accumulated other
comprehensive (loss) income � (22,604 ) � � 45,155 � Total
Stockholders' Equity � 959,807 � � � 963,524 � Total Liabilities
and Stockholders' Equity $ 1,182,525 � � $ 1,228,226 �
INTERACTIVE DATA CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
� � � � �
Twelve Months Ended December 31,
(Unaudited) �
2008 � � � � �
2007 � �
Cash
flows provided by (used in) operating activities: � Net income
$ 142,648 $ 125,983 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
54,730 49,483 Excess tax benefits from stock-based compensation
(2,020 ) (4,171 ) Deferred income taxes 855 (8,869 ) Amortization
of discounts and premiums on marketable securities, net 648 590
Stock-based compensation 14,344 13,364 Minority interest, net of
tax 21 - Provision for doubtful accounts (510 ) (74 ) Loss on
disposition of fixed assets 325 2,332 Changes in operating assets
and liabilities, net � (14,799 ) � 5,924 �
NET CASH PROVIDED BY
OPERATING ACTIVITIES 196,242 184,562 �
Cash flows used in
investing activities: � � Purchase of fixed assets (45,509 )
(36,809 ) Acquisition of businesses, net of cash acquired (43,666 )
(24,473 ) Purchase and maturities of marketable securities, net �
(1,787 ) � (30,723 )
NET CASH USED IN INVESTING ACTIVITIES
(90,962 ) (92,005 ) �
Cash flows used in financing
activities: � Purchase of treasury stock (52,494 ) (31,816 )
Proceeds from exercise of stock options and employee stock purchase
plan 17,010 31,413 Common stock cash dividends paid (103,596 )
(47,072 ) Excess tax benefits from stock based compensation � 2,020
� � 4,171 �
NET CASH USED IN FINANCING ACTIVITIES (137,060 )
(43,304 ) � Effect of exchange rates on cash � (19,528 ) � 3,768 �
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (51,308
) 53,021
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD �
205,470 � � 152,449 � �
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 154,162 � � � � $ 205,470 �
RECONCILIATION OF NON-GAAP
MEASURES
� � � � � �
Revenue Before Effects of
Foreign Exchange, Acquisition-Related Revenue
and Intercompany Eliminations
Resulting from Acquisitions*
(In thousands)
�
Three Months Ended Twelve Months Ended December
31, December 31, �
2008 � � �
2007 �
Change �
2008 � � �
2007 � �
Change
Revenue Institutional Services: Pricing and Reference Data $
124,505 $ 114,252 9.0 % $ 475,803 $ 429,420 10.8 % Real-Time
Services 38,951 37,547 3.7 % 152,989 139,385 9.8 % Fixed Income
Analytics � 8,458 � � � 8,136 � 4.0 % � 32,846 � � � 32,442 � � 1.2
% Institutional Services total 171,914 159,935 7.5 % 661,638
601,247 10.0 % � Active Trader Services: eSignal � 22,178 � � �
22,145 � 0.1 % � 88,903 � � � 88,363 � � 0.6 % Active Trader
Services total 22,178 22,145 0.1 % 88,903 88,363 0.6 % � Total
revenue 194,092 182,080 6.6 % 750,541 689,610 8.8 % � Effects of
foreign exchange Institutional Services: Pricing and Reference Data
8,013 - - 8,240 - - Real-Time Services 4,673 - - 446 - - Fixed
Income Analytics � 29 � � � - � - � � 35 � � � - � � - �
Institutional Services total 12,715 - 8,721 - � Active Trader
Services: eSignal � 641 � � � - � - � � 604 � � � - � � - � Active
Trader Services total 641 - - 604 - - � Total effects of foreign
exchange 13,356 - - 9,325 - - � � Non-GAAP revenue before effects
of foreign exchange 207,448 182,080 13.9 % 759,866 689,610 10.2 % �
Acquisition-related revenue Acquisition-related revenue - NTT DATA
Financial (485 ) - - (485 ) - - Acquisition-related revenue -
Kler's (1,818 ) - - (3,132 ) - - Acquisition-related revenue -
Xcitek Market Data � - � � � - � - � � (3,058 ) � � - � � - � Total
effects of acquisition-related revenue (2,303 ) - - (6,675 ) - - �
Non-GAAP revenue before effects of
foreign exchange and acquisition-related revenue
205,145 182,080 12.7 % 753,191 689,610 9.2 % � Intercompany
eliminations resulting from Xcitek Market Data acquisition � - � �
� - � - � � - � � � (76 ) � - � � Non-GAAP revenue before above
factors* $ 205,145 � � $ 182,080 � 12.7 % $ 753,191 � � $ 689,534 �
� 9.2 % � * Also referred to in this news release as organic
revenue
RECONCILIATION OF NON-GAAP
MEASURES (CONTINUED)
� � � � � �
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 Twelve Months Ended December
31, December 31, �
2008 � � �
2007 �
Change �
2008 � � �
2007 � �
Change
Interactive Data Pricing and Reference Data revenue $ 124,505 $
114,252 9.0 % $ 475,803 $ 429,420 10.8 % Effects of foreign
exchange � 8,013 � � � - � - � � 8,240 � � � - � � - � 132,518
114,252 16.0 % 484,043 429,420 12.7 % Acquisition-related revenue -
NTT DATA Financial (485 ) - - (485 ) - - Acquisition-related
revenue - Kler's (1,818 ) - - (3,132 ) - - Acquisition-related
revenue � Xcitek Market Data - - - (3,058 ) - - Intercompany
eliminations resulting from Xcitek Market Data acquisition � - � �
� - � - � � - � � � (76 ) � - � Non-GAAP revenue before above
factors $ 130,215 � � $ 114,252 � 14.0 % $ 477,368 � � $ 429,344 �
� 11.2 %
Interactive Data Real-Time
Services Revenue
Before Effects of Foreign
Exchange
(In thousands)
� � � � � �
Three Months Ended Twelve Months Ended
December 31, December 31, �
2008 � �
2007 �
Change �
2008 � �
2007 �
Change Interactive Data Real-Time Services revenue $ 38,951
$ 37,547 3.7 % $ 152,989 $ 139,385 9.8 % Effects of foreign
exchange � 4,673 � � - � - � � 446 � � - � - � Non-GAAP revenue
before effects of foreign exchange $ 43,624 � $ 37,547 � 16.2 % $
153,435 � $ 139,385 � 10.1 %
Interactive Data Fixed Income
Analytics Revenue
Before Effects of Foreign
Exchange
(In thousands)
� � � � � �
Three Months Ended Twelve Months Ended
December 31, �
December 31, � �
2008 � �
2007 �
Change � �
2008 � �
2007 �
Change � Interactive Data Fixed Income Analytics revenue $
8,458
$ 8,136 4.0 % $ 32,846 $ 32,442 1.2 % Effects of foreign exchange
�
29 �
�
-
�
-
�
�
35 �
�
- �
-
� Non-GAAP revenue before effects of foreign exchange $ 8,487 � $
8,136 � 4.3 % $ 32,881 � $ 32,442 � 1.4 %
eSignal Revenue
Before Effects of Foreign
Exchange
(In thousands)
� � � � � �
Three Months Ended Twelve Months Ended
December 31, December 31, �
2008 � �
2007 �
Change �
2008 � �
2007 �
Change eSignal revenue $ 22,178 $ 22,145 0.1 % $ 88,903 $
88,363 0.6 % Effects of foreign exchange � 641 � � - � - � � 604 �
� - � - � Non-GAAP revenue before effects of foreign exchange $
22,819 � $ 22,145 � 3.0 % $ 89,507 � $ 88,363 � 1.3 %
RECONCILIATION OF NON-GAAP
MEASURES (CONTINUED)
�
� � � � � �
Revenue by Geography Before
Effects of Foreign Exchange and Acquisitions
(In thousands)
�
Three Months Ended Twelve Months Ended December
31, December 31, �
2008 � � �
2007 � �
Change �
2008 � � �
2007 � �
Change
Revenue by Geography North America $ 138,224 $ 127,732 8.2 % $
529,586 $ 489,185 8.3 % Europe 51,215 50,231 2.0 % 202,554 185,225
9.4 % Asia-Pacific � 4,653 � � � 4,117 � � 13.0 % � 18,401 � � �
15,200 � � 21.1 % Total revenue $ 194,092 � � $ 182,080 � � 6.6 % $
750,541 � � $ 689,610 � � 8.8 % � �
Three Months Ended
Twelve Months Ended December 31, December 31,
Revenue by Geography as a percentage of revenue �
2008 � � �
2007 � �
Change �
2008 � � �
2007 � �
Change North America 71.2 % 70.2 % 1.1 % 70.6 % 70.9 % -0.4
% Europe 26.4 % 27.6 % -1.2 % 27.0 % 26.9 % 0.1 % Asia-Pacific �
2.4 % � � 2.3 % � 0.1 % � 2.5 % � � 2.2 % � 0.2 % Total revenue �
100.0 % � � 100.0 % � 0.0 % � 100.0 % � � 100.0 % � 0.0 %
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Three Months Ended Twelve Months Ended December
31, December 31, �
2008 � � �
2007 � �
Change �
2008 � � �
2007 � �
Change
Revenue - North America
$
138,224
$
127,732 8.2 %
$
529,586
$
489,185 8.3 % Acquisition-related revenue � Xcitek Market Data - -
- (3,058 ) - - Intercompany eliminations resulting from Xcitek
Market Data acquisition � - � � � - � � - � � - � � � (76 ) � - �
Non-GAAP revenue before effects of foreign exchange $ 138,224 � $
127,732 � 8.2 % $ 526,528 � $ 489,109 � 7.7 % � �
Three Months
Ended Twelve Months Ended December 31,
December 31, �
2008 � � �
2007 � �
Change �
2008 � � �
2007 � �
Change
Revenue - Europe
$
51,215
$
50,231 2.0 %
$
202,554
$
185,225 9.4 % Effects of foreign exchange � 12,474 � � � - � � - �
� 9,444 � � � - � � - � 63,689 50,231 26.8 % 211,998 185,225 14.5 %
Acquisition-related revenue - Kler's � (1,818 ) � � - � � - � �
(3,132 ) � � - � � - � Non-GAAP revenue before effects of foreign
exchange $ 61,871 � � $ 50,231 � � 23.2 % $ 208,866 � � $ 185,225 �
� 12.8 % � �
Three Months Ended Twelve Months Ended
December 31, December 31, �
2008 � � �
2007 � �
Change �
2008 � � �
2007 � �
Change Revenue - Asia Pacific
$
4,653
$
4,117 13.0 %
$
18,401
$
15,200 21.1 % Effects of foreign exchange � 882 � � � - � � - � �
(119 ) � � - � � - � 5,535 4,117 34.4 % 18,282 15,200 20.3 %
Acquisition-related revenue - NTT DATA Financial � (485 ) � � - � �
- � � (485 ) � � - � � - � Non-GAAP revenue before effects of
foreign exchange $ 5,050 � � $ 4,117 � � 22.7 % $ 17,797 � � $
15,200 � � 17.1 %
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (CONTINUED)
�
� � � � � �
Total Costs and Expenses Before
Effects of Acquisition-Related
Total Costs and Expenses, and
Foreign Exchange
(In thousands)
�
Three Months Ended Twelve Months Ended December
31, December 31, �
2008 � � �
2007 �
Change �
2008 � � �
2007 �
Change �
Total costs & expenses $ 137,001 $ 137,116 -0.1 % $ 540,858 $
513,990 5.2 % � Effects of foreign exchange � 9,382 � � � - � - � �
4,453 � � � - � - � � Total costs & expenses before the effects
of foreign exchange 146,383 137,116 6.8 % 545,311
513,990
6.1 % � Effects of foreign exchange on revaluation of overseas bank
balances � 273 � � � 312 � - � � 5,102 � � � 216 � - � � Total
costs & expenses before all foreign exchange-related items
146,656 137,428 6.7 % 550,413 514,206 7.0 % � Acquisition-related
costs & expenses Total costs & expenses � NTT DATA
Financial (387 ) - - (387 ) - - Total costs & expenses � Kler's
(1,100 ) - - (1,769 ) - - Total costs & expenses � Xcitek
Market Data � - � � � - � - � � (1,849 ) � � - � - � (1,487 ) - -
(4,005 ) - - � Non-GAAP total costs & expenses before above
factors $ 145,169 � � $ 137,428 � 5.6 % $ 546,408 � � $ 514,206 �
6.3 %
Operating Profit* Before
Effects of Acquisitions and Foreign Exchange
(In thousands)
� � � � � �
Three Months Ended Twelve Months Ended
December 31, December 31, �
2008 � �
2007 �
Change �
2008 � �
2007 �
Change � Non-GAAP revenue before above factors $ 205,145 $
182,080 12.7 % $ 753,191 $ 689,534 9.2 % � Non-GAAP total costs and
expenses before above factors � 145,169 � � 137,428 � 5.6 % �
546,408 � � 514,206 � 6.3 % � Non-GAAP operating profit from core
businesses $ 59,976 � $ 44,652 � 34.3 % $ 206,783 � $ 175,328 �
17.9 % � * Also referred to in this news release as organic income
from operations
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
2009 OUTLOOK
GAAP Revenue to Organic (non-GAAP) Revenue
- 2009 revenue growth over 2008
(on a percentage change basis) is expected to be in the low single
digit range.
- This forecast includes an
anticipated positive impact of approximately two percentage points
from acquisitions completed in 2008.
- This forecast includes a
negative impact of at least five percentage points associated with
changes in foreign exchange rates based on 2008 year-end
rates.
- Excluding the above factors,
2009 organic (non-GAAP) revenue growth over 2008 (on a percentage
change basis) is expected to be in the mid-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 expected to range
from roughly flat to a low single digit decline.
- This forecast includes an
anticipated positive impact of approximately two percentage points
from acquisitions completed in 2008.
- This forecast includes a
negative impact of approximately five percentage points associated
with changes in foreign exchange rates based on 2008 year-end
rates.
- Excluding the above factors,
2009 organic (non-GAAP) income from operations growth versus 2008
(on a percentage change basis) is expected to be 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 on overseas monetary assets.
SUPPLEMENTARY DATA
� � �
eSignal Direct Terminal
Subscriptions
�
eSignal�s direct subscription
terminals have been restated to reflect the reclassification of
certain product sales that had been inadvertently included as
direct terminal subscriptions in prior quarters:
�
Quarterly History 2006 through
2008
�
March 31, June 30, September 30, December
31, 2008 �
2008 �
2008 �
2008
60,809 59,048 58,137 54,870 �
March 31, June 30,
September 30, December 31, 2007 �
2007
�
2007 �
2007 61,066 60,589 61,297 61,347 �
March
31, June 30, September 30, December 31,
2006 �
2006 �
2006 �
2006 61,096 60,944
61,029 60,951
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