Interactive Data Corporation (NYSE: IDC) today reported its
financial results for the fourth quarter and full year ended
December 31, 2009. Interactive Data’s fourth-quarter 2009 revenue
of $194.1 million was unchanged from the fourth quarter of 2008.
Income from operations in the fourth quarter of 2009 was $50.4
million, an 11.7% decrease from $57.1 million in the same period
one year ago. Net income attributable to Interactive Data for the
fourth quarter of 2009 was $33.0 million, or $0.34 per diluted
share, a decrease of 17.6% over net income of $40.1 million, or
$0.42 per diluted share, in the fourth quarter of 2008.
For the year ended December 31, 2009, Interactive Data’s revenue
grew to $757.2 million from $750.5 million in 2008. Income from
operations for 2009 was $207.7 million, compared with $209.7
million in 2008. Net income attributable to Interactive Data for
2009 was $141.2 million, or $1.47 per diluted share, versus $142.6
million, or $1.48 per diluted share, in the comparable period of
2008.
“Interactive Data successfully navigated through some of the
most challenging conditions that our industry has experienced to
achieve our full-year 2009 profit targets and deliver solid growth
in net cash provided by operating activities,” stated Ray D’Arcy,
Interactive Data’s president and chief executive officer. “Our
organic revenue growth of 2.8% in 2009 was driven by the resilience
of our fixed income evaluations and reference data offerings, which
enabled our Pricing and Reference Data business to grow organically
at 6.0% for the year. The combination of our top-line growth and
decisive cost-control initiatives implemented earlier in the year
enabled the Company to increase its underlying profitability by
5.5%. Market conditions began to show signs of stabilization
starting in the third quarter of 2009, and this trend continued
through the fourth quarter.”
Commenting on the Company’s fourth-quarter 2009 performance,
D’Arcy said, “Our fourth-quarter 2009 results were generally in
line with our expectations entering the quarter. In terms of
revenue, the contributions from acquisitions and the positive
impact of foreign exchange offset a 3.4% decline in organic
revenue. The decline in organic revenue reflects several factors.
First, our performance compared against record fourth-quarter 2008
revenue that was aided by more than $5 million in certain one-time
sales, strong usage-related revenue and other items. Second, we
continued to experience softness in our active trader and real-time
datafeed services. Fortunately, this softness was partially offset
by sustained demand for our fixed income evaluations and reference
data services. We continued to carefully manage our operating
expenses during the fourth quarter of 2009. However, we received an
updated pension valuation related to the Company's overseas pension
plan, which reduced our fourth-quarter 2009 income from operations
by $3.4 million and fourth-quarter 2009 net income by $2.2 million.
Other factors that impacted fourth-quarter 2009 net income were an
increase in depreciation and amortization, lower interest income
and a higher effective quarterly tax rate.
“We are encouraged by the continued stabilization of market
conditions during the fourth quarter, which is reflected by new
sales that were the highest of any quarter in 2009 and cancellation
levels that were on a par with the prior two quarters,” D’Arcy
added. “From a strategic perspective, we move into 2010 with good
momentum and we are well positioned to help customers continue
adapting to ongoing changes in technology, market structure and
regulations. We have continued to make investments to enhance and
expand our fixed income evaluation and reference data services,
which we believe will drive even greater customer adoption. In
December 2009, we formed the Real-Time Market Data and Trading
Solutions Group, which combines the resources of our eSignal,
Managed Solutions, and Real-Time Services businesses into a single
organization. This initiative supports our plans to integrate our
suite of real-time market data and innovative, hosted technology
services and solutions to more effectively capitalize on
opportunities in the wealth management and electronic trading
sectors. In addition, we recently completed three acquisitions that
help further strengthen our real-time capabilities in the wealth
management and electronic trading sectors, and provide us with a
direct presence in the Middle East. These recent acquisitions,
combined with our ongoing investments in our content, capabilities,
delivery platforms and infrastructure, are enabling us to address a
wide range of valuation, transparency, risk management, compliance,
electronic trading and wealth management challenges facing our
customers around the world.”
In terms of the Company’s outlook for 2010, D’Arcy concluded,
“Looking ahead, although the market stabilization we’ve observed
over the past several months has been encouraging, there is still a
degree of uncertainty regarding overall market conditions in 2010.
We anticipate that 2010 revenue will range between $810 million and
$830 million due to the contribution from recent acquisitions and
improved organic revenue performance over the coming quarters. Our
anticipated revenue growth, in combination with ongoing
cost-control initiatives, will enable us to support healthy
operating income margins in the range of 25% to 26% even as we make
important strategic investments, reinstate certain incentive bonus
compensation programs and merit-based annual salary increases, and
incur higher depreciation and amortization expense. In addition,
producing substantial net cash provided by operating activities has
been a hallmark of Interactive Data’s business model for many
years, and we expect this trend to continue in 2010.”
Segment Reporting, Related Operating Highlights and Revenue
by Geography
Institutional Services Segment:
- Interactive Data Pricing and
Reference Data reported fourth-quarter 2009 revenue of $127.6
million, an increase of $3.1 million, or 2.5%, over the prior
year’s fourth-quarter 2008 revenue (or an increase of $1.2 million,
or 0.9%, before the effects of foreign exchange). 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 a net of $1.7 million to
fourth-quarter 2009 revenue. Fourth-quarter 2009 organic revenue
for Interactive Data Pricing and Reference Data, which excludes the
effects of foreign exchange, incremental contributions from NDF,
and related intercompany eliminations associated with NDF and the
Online Financial Solutions (“OFS”) data and tools assets that were
acquired in December 2009, was essentially unchanged from the same
period last year. While we continued making progress to expand this
business in both the U.S. and Europe, comparisons with the
fourth-quarter of 2008 are complicated since the year-ago quarter
included more than $5 million in certain one-time sales, strong
usage-related revenue due in part to increased frequency related to
the volatility in the fixed income markets, and other items. During
the fourth quarter of 2009, Interactive Data Pricing and Reference
Data began delivering intraday fixed income valuations to help
clients around the world more closely monitor portfolio value
changes, and provide European and Asian domiciled funds with new
inputs to their fair value procedures.
- Interactive Data Real-Time
Services generated fourth-quarter 2009 revenue of $37.3 million, a
decrease of $1.6 million, or 4.2%, over the same quarter last year
(or a decrease of $3.6 million, or 9.3% before the effects of
foreign exchange). In early December 2009, Interactive Data
completed its acquisition of the OFS data and tools assets from Dow
Jones & Co. Organic revenue for Interactive Data Real-Time
Services, which excludes the one-month contribution of $1.0 million
in revenue from the OFS data and tools assets and the effects of
foreign exchange, decreased 11.7% from the same period last year.
This performance primarily reflects the impact of increased
real-time datafeed services cancellations primarily related to
market conditions during the past several quarters, partially
offset by strong organic revenue results for its Web-based
solutions in the U.S. In January 2010, Interactive Data launched
ETF CenterSM, a fully-hosted and customizable Web-based portal that
Registered Investment Advisors (RIAs) and wealth managers can
integrate into their own websites and other online
applications.
- Interactive Data Fixed Income
Analytics reported revenue for the fourth quarter of 2009 of $8.6
million, an increase of 1.2% over the fourth quarter of 2008.
During the fourth quarter of 2009, this business released BondEdge®
Asset Manager, a new package of capabilities designed to assist
portfolio managers and analysts at asset management firms in
managing and reporting on the relative risk between their
portfolios and relevant indices or liability benchmarks.
Active Trader Services Segment:
- eSignal’s fourth-quarter 2009
revenue of $20.6 million decreased by $1.6 million, or 7.1%, from
the fourth quarter of 2008 (or a decline of $1.7 million, or 7.7%,
before the effects of foreign exchange) due to lower average
subscription fees and lower advertising revenue. As of December 31,
2009, eSignal managed approximately 56,500 direct subscription
terminals, which is 3.0% higher than the number of direct
subscription terminals as of December 31, 2008. During the fourth
quarter of 2009, this business released Market-QSM 3.2, which
provides upgraded features to enable users to track real-time
streaming market data directly from their Web browser, including
advanced charting, alerts, option chains, and Canadian fundamental
market data.
Revenue by Geography:
- Interactive Data’s North
American fourth-quarter 2009 revenue of $134.6 million declined by
$3.6 million, or 2.6%, from the same period last year. Organic
revenue for Interactive Data’s North American business, which
excludes the one-month contribution of $1.0 million in revenue from
the OFS data and tools assets and eliminations associated with the
Company’s redistribution relationship with NDF in Japan and the OFS
assets, declined 2.4% as growth in its fixed income evaluations,
reference data services and web-based solutions was more than
offset by revenue weakness in its real-time market data and eSignal
product areas. The Company’s fourth-quarter 2009 revenue in Europe
of $51.3 million was essentially unchanged from revenue in the
fourth quarter of 2008. Excluding the effects of foreign exchange,
fourth-quarter 2009 organic revenue in Europe declined by 6.1%
primarily due to weakness within the Company’s real-time market
data services and exceptionally strong fourth-quarter 2008 revenue
within its Pricing and Reference Data business. Interactive Data’s
Asia-Pacific revenue of $8.2 million in the fourth quarter of 2009
grew 76.5% from the fourth quarter of 2008 primarily due to
incremental revenue from NDF. Excluding the effects of foreign
exchange and the contribution from NDF, Asia-Pacific organic
revenue declined 5.5% during the fourth quarter of 2009.
- A table comparing revenue by
geography, including the impact of foreign exchange as a percentage
of total revenue for the three-month and twelve-month periods ended
December 31, 2009 and 2008, for each of Interactive Data’s major
geographic regions has been included on page 13 of this press
release.
Other Fourth-Quarter 2009 Financial and Recent Operating
Highlights
Effects of Foreign Exchange:
- Interactive Data's
fourth-quarter 2009 revenue was favorably impacted by $4.1 million
due to the effects of foreign exchange resulting from a weaker U.S.
dollar in comparison with the fourth quarter of 2008.
Fourth-quarter 2009 revenue before the effects of foreign exchange
declined by $4.0 million, or 2.1%, over the same period in 2008.
Total costs and expenses in the fourth quarter of 2009 were
unfavorably impacted by $3.9 million as a result of the effects of
foreign exchange. Fourth-quarter 2009 total costs and expenses
before the effects of foreign exchange increased by $2.8 million,
or 2.0%, over the fourth quarter of 2008.
- A table comparing the average
foreign exchange rates during the three-month and twelve-month
periods ended December 31, 2009 and 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 December 31, 2009,
Interactive Data had no outstanding debt and had cash, cash
equivalents and marketable securities of $306.0 million. During the
fourth quarter of 2009, Interactive Data repurchased 480,000 shares
of its common stock at an average price of $26.06 per share.
Entering the first quarter of 2010, approximately 1.5 million
shares were available for repurchase under the existing stock
buyback program. During the fourth quarter of 2009, Interactive
Data paid $18.9 million to stockholders in connection with its
regular quarterly dividend of $0.20 per share.
Formation of Interactive Data’s Real-Time Market Data and
Trading Solutions Group
- In December 2009, Interactive
Data announced the formation of the Real-Time Market Data and
Trading Solutions Group, which combines the resources of its
eSignal, Managed Solutions, and Real-Time Services businesses into
a single organization. The formation of this new group, which is
led by Jeffrey Banker, supports the Company’s plans to integrate
its suite of real-time market data and innovative, hosted
technology services and solutions to more effectively capitalize on
opportunities in the wealth management and electronic trading
sectors.
Acquisitions:
- On December 1, 2009, Interactive
Data acquired the data and tools assets of Dow Jones & Company,
Inc.’s OFS business. This acquisition substantially expands
Interactive Data’s growing Web-based solutions business in North
America, and also creates opportunities for Interactive Data to
offer OFS customers a broader range of sophisticated Web-based
offerings, real-time market data services and other desktop
solutions. The Company is integrating the acquired OFS assets into
its U.S. Managed Solutions group, which is part of Interactive
Data’s newly formed Real-Time Market Data and Trading Solutions
Group.
- On January 14, 2010, Interactive
Data purchased the assets of Dubai-based Telerate Systems Limited
(“TSL”), a long-time sales agent that had marketed the desktop
solutions from Interactive Data's eSignal division to the
commodities, financial futures and foreign exchange trading
community in the Middle East. This transaction advances Interactive
Data's strategy of expanding internationally by establishing a
direct presence in the Middle East. Through this transaction, and
by making investments in local content and product development,
Interactive Data plans to more effectively market its entire
portfolio of products and services in this region. TSL has been
rebranded under the Interactive Data name.
- On January 15, 2010, Interactive
Data acquired the assets of 7ticks, LLC, an innovative provider of
electronic trading networks and managed services. A growing base of
proprietary trading groups, clearing firms, global investment
banks, brokers, market makers, hedge funds and independent software
vendors rely on 7ticks for direct exchange access, proximity
hosting, and support services that are designed to facilitate ultra
low latency electronic trading of North American derivatives,
options and commodities securities. This acquisition supports
Interactive Data’s strategy to address the latency sensitive
trading needs of its institutional customers. Acquiring 7ticks
accelerates Interactive Data’s plans to increase the flexibility,
agility and resiliency of its network infrastructure, thereby
supporting a broader range of high-quality direct exchange access
and consolidated datafeed services. The 7ticks business is operated
as part of Interactive Data’s newly formed Real-Time Market Data
and Trading Solutions Group.
Review of Strategic Alternatives:
- On January 15, 2010, Interactive
Data announced that its Board of Directors was conducting a review
of strategic alternatives for the Company. There can be no
assurance on the potential outcome or timing of this review
process.
Full-Year 2009 Results
- For the year ended December 31,
2009, Interactive Data reported revenue of $757.2 million. Foreign
exchange unfavorably impacted revenue by $29.1 million and
acquisitions contributed a net of $14.7 million during 2009.
Excluding the effects of foreign exchange and the net impact of
acquisitions, 2009 organic revenue grew by 2.8%. Total costs and
expenses for 2009 increased by $8.6 million, or 1.6%, to $549.5
million from 2008 levels. Net income attributable to Interactive
Data for 2009 was $141.2 million, or $1.47 per diluted share. The
effective tax rate for 2009 was 32.5% compared with 34.3% for
2008.
- Interactive Data’s results for
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
15 of this press release.
Conference Call Information
Interactive Data Corporation's management will conduct a
conference call on Tuesday, February 23, 2010 at 11:00 a.m. Eastern
Time to discuss the fourth-quarter and full-year 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 50971375. 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 23 at 2:00 p.m. until Tuesday, March 9, 2010 at 2:00 p.m.,
and it can be accessed by dialing (706) 645-9291 or (800) 642-1687,
using access code 50971375. 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 the
following: that we anticipate 2010 revenue will range between $810
million and $830 million; that revenue growth will be derived from
the contribution from recent acquisitions as well as improved
organic revenue performance; that our anticipated revenue growth,
in combination with our ongoing cost-control initiatives, will
enable us to support healthy operating income margins in the range
of 25% to 26%; that we will produce substantial net cash provided
by operating activities; that from a strategic perspective, we move
into 2010 with good momentum; that we are well positioned to help
customers continue adapting to ongoing changes in technology,
market structure and regulations; and that our investments will
enhance and expand our services and drive even greater customer
adoption of them. 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. These
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) 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 integrate acquisitions;
(xiii) 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; (xiv) 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; (xv) certain of our subsidiaries are subject to complex
regulations and licensing requirements; (xvi) the risks of doing
business internationally, which includes the impact that changes in
foreign exchange rates may have upon our results of operations;
(xvii) the timing and magnitude of discrete items that may impact
our effective tax rate in any given reporting period; (xviii) our
ability to attract and retain key personnel; (xix) the actual
timing of planned capital expenditures which may differ from our
expectations; (xx) 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.
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 Twelve
Months Ended December 31, December 31,
2009 2008 Change 2009
2008 Change (Audited)
REVENUE $ 194,100 $ 194,092 0.0 % $ 757,218 $ 750,541 0.9 % COSTS
AND EXPENSES: Cost of services 62,929 59,901 5.1 % 250,105 241,880
3.4 % Selling, general and administrative 64,123 63,147 1.5 %
237,041 244,248 -3.0 % Depreciation 8,838 7,028 25.8 % 31,800
27,044 17.6 % Amortization 7,808 6,925
12.8 % 30,523 27,686
10.2 % Total costs and expenses 143,698
137,001 4.9 % 549,469
540,858 1.6 % INCOME FROM OPERATIONS 50,402
57,091 -11.7 % 207,749 209,683 -0.9 % Interest income 324
1,360 -76.2 % 1,819
7,568 -76.0 % INCOME BEFORE INCOME
TAXES 50,726 58,451 -13.2 % 209,568 217,251 -3.5 % Income tax
expense 17,677 18,322 -3.5 %
68,162 74,582 -8.6 % NET
INCOME $ 33,049 $ 40,129 -17.6 % $ 141,406 $ 142,669 -0.9 % Less:
Net income attributable to noncontrolling interest -
(21 ) - (172 ) (21 )
- NET INCOME ATTRIBUTABLE TO INTERACTIVE DATA
CORPORATION $ 33,049 $ 40,108 -17.6 % $
141,234 $ 142,648 -1.0 %
EARNINGS PER SHARE- INTERACTIVE DATA CORPORATION: Basic $ 0.35 $
0.43 -18.6 % $ 1.50 $ 1.52 -1.3 % Diluted $ 0.34 $ 0.42 -19.0 % $
1.47 $ 1.48 -0.7 % Cash dividends declared per common share* $ 0.20
$ 0.20 0.0 % $ 0.60 $ 0.65 -7.7 % WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING: Basic 94,299 93,654 0.7 % 94,001 93,984 0.0 % Diluted
96,436 95,627 0.8 % 96,200 96,674 -0.5 % * The payment of
certain quarterly cash dividends did not occur in the quarter in
which it was declared.
INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) December 31, December
31, 2009 2008 ASSETS
(Unaudited) Assets: Cash and cash equivalents
$ 209,946 $ 154,162 Marketable securities 96,077 74,616 Accounts
receivable, net 108,349 109,052 Prepaid expenses and other current
assets 21,810 16,039 Deferred income taxes 6,532
6,511 Total current assets 442,714
360,380 Property and equipment, net
123,245 109,210 Goodwill 570,256 550,282 Intangible assets, net
138,988 157,723 Other assets 5,968
4,930 Total Assets $ 1,281,171 $ 1,182,525
LIABILITIES AND EQUITY
Liabilities: Accounts payable, trade $ 20,957 $ 17,011
Accrued liabilities 76,195 85,088 Payables to affiliates 1,999 47
Income taxes payable 4,500 6,532 Deferred revenue 34,586 34,106
Dividends payable - 18,705 Total
current liabilities 138,237 161,489
Income taxes payable 10,986 11,158 Deferred tax liabilities
33,871 39,057 Other liabilities 15,971
10,418 Total Liabilities 199,065
222,122
Equity: Interactive Data Corporation
stockholders' equity: Preferred stock - - Common stock 1,046 1,027
Additional paid-in-capital 1,019,133 976,651 Treasury stock, at
cost (221,246 ) (190,000 ) Accumulated earnings 279,096 194,733
Accumulated other comprehensive income (loss) 4,077
(22,604 ) Total Interactive Data Corporation
stockholders' equity 1,082,106 959,807 Noncontrolling interest
- 596 Total Equity
1,082,106 960,403 Total Liabilities and
Equity $ 1,281,171 $ 1,182,525
INTERACTIVE
DATA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands)
Twelve Months Ended
December 31, 2009 2008
(Unaudited) Cash flows provided by (used in) operating
activities: Net income $ 141,406 $ 142,669 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 62,323 54,730 Amortization of
discounts and premiums on marketable securities, net 1,948 648
Deferred income taxes (6,292 ) 855 Excess tax benefits from
stock-based compensation (2,768 ) (2,020 ) Stock-based compensation
16,180 14,344 Provision for doubtful accounts and sales credits
1,813 (510 ) Loss on dispositions of fixed assets 729 325 Changes
in operating assets and liabilities, net Accounts receivable 2,233
(1,839 ) Prepaid expenses and other assets (1,969 ) (332 ) Accounts
and taxes payable and payable to affiliates, net 6,887 (9,993 )
Accrued expenses and other liabilities (13,210 ) (2,602 ) Deferred
revenue (1,146 ) (33 )
NET CASH PROVIDED BY
OPERATING ACTIVITIES 208,134 196,242
Cash flows
provided by (used in) investing activities: Purchase of fixed
assets (42,829 ) (45,509 ) Business acquisitions, net of cash
acquired (16,731 ) (43,666 ) Purchase of marketable securities
(257,390 ) (172,068 ) Proceeds from maturities of marketable
securities 233,957 170,281
NET CASH USED IN INVESTING ACTIVITIES (82,993 ) (90,962 )
Cash flows provided by (used in) financing
activities: Proceeds from exercise of stock options and
employee stock purchase plan 23,379 17,010 Purchase of treasury
stock (30,670 ) (52,494 ) Common stock cash dividends paid (75,273
) (103,596 ) Excess tax benefits from stock-based compensation
2,768 2,020
NET CASH USED IN
FINANCING ACTIVITIES (79,796 ) (137,060 ) Effect of
change in exchange rates on cash and cash equivalents 10,439
(19,528 )
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 55,784 (51,308 )
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD 154,162
205,470
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 209,946 $ 154,162
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Revenue Before Effects of Foreign Exchange, Acquisition-Related
Revenue and Intercompany Eliminations Resulting from
Acquisitions* Unaudited (In thousands)
Three Months Ended
Twelve Months Ended December 31, December 31,
2009 2008 Change 2009
2008 Change Revenue Institutional
Services: Pricing and Reference Data $ 127,631 $ 124,505 2.5 % $
499,385 $ 475,803 5.0 % Real-Time Services 37,310 38,951 -4.2 %
141,302 152,989 -7.6 % Fixed Income Analytics 8,563
8,458 1.2 % 33,156
32,846 0.9 % Institutional Services total
173,504 171,914 0.9 % 673,843 661,638 1.8 % Active Trader
Services: eSignal 20,596 22,178
-7.1 % 83,375 88,903
-6.2 % Active Trader Services total 20,596 22,178 -7.1 %
83,375 88,903 -6.2 % Total revenue 194,100 194,092 0.0 %
757,218 750,541 0.9 % Effects of foreign exchange
Institutional Services: Pricing and Reference Data (1,944 ) - -
18,453 - - Real-Time Services (1,990 ) - - 8,932 - - Fixed Income
Analytics (3 ) - -
46 - - Institutional
Services total (3,937 ) - - 27,431 - - Active Trader
Services: eSignal (117 ) - -
1,677 - -
Active Trader Services total (117 ) - - 1,677 - - Total
effects of foreign exchange (4,054 ) - - 29,108 - -
Non-GAAP revenue before effects of foreign exchange 190,046 194,092
-2.1 % 786,326 750,541 4.8 % Acquisition-related revenue
Acquisition-related revenue - OFS (977 ) - - (977 ) - -
Acquisition-related revenue - NTT DATA Financial (3,398 ) (485 ) -
(13,397 ) (485 ) - Acquisition-related revenue - Kler's -
- - (5,984 )
- - Total effects of
acquisition-related revenue (4,375 ) (485 ) - (20,358 ) (485 ) -
Non-GAAP revenue before effects of
foreign exchange andacquisition-related revenue
185,671 193,607 -4.1 % 765,968 750,056 2.1 % Intercompany
eliminations Intercompany eliminations - OFS - (72 ) - - (72 ) -
Intercompany eliminations - NTT DATA Financial -
(1,250 ) - -
(5,076 ) - Non-GAAP revenue before
above factors* $ 185,671 $ 192,285 -3.4
% $ 765,968 $ 744,908 2.8 % *
Also referred to in this news release as organic revenue
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED)
Interactive Data Pricing and Reference Data Revenue
Before Effects of Foreign Exchange, Acquisition-Related
Revenue and Intercompany Eliminations Resulting from
Acquisitions Unaudited (In thousands)
Three Months Ended
Twelve Months Ended December 31, December 31,
2009 2008 Change 2009
2008 Change Interactive Data Pricing
and Reference Data revenue $ 127,631 $ 124,505 2.5% $ 499,385 $
475,803 5.0% Effects of foreign exchange (1,944) - -
18,453 - - 125,687 124,505 0.9% 517,838 475,803 8.8%
Acquisition-related revenue - NTT DATA Financial (3,398) (485) -
(13,397) (485) - Acquisition-related revenue - Kler's - - - (5,984)
- - Intercompany eliminations - OFS - (27) - - (27) - Intercompany
eliminations - NTT DATA Financial - (1,250) - -
(5,076) - Non-GAAP revenue * $ 122,289 $
122,743 -0.4% $ 498,457 $ 470,215 6.0% * Also
referred to in this news release as organic revenue
Interactive
Data Real-Time Services Revenue Before Effects of Foreign
Exchange Unaudited (In thousands)
Three Months Ended
Twelve Months Ended December 31, December 31,
2009 2008 Change 2009
2008 Change Interactive Data Real-Time
Services revenue $ 37,310 $ 38,951 -4.2% $ 141,302 $ 152,989 -7.6%
Effects of foreign exchange (1,990) - - 8,932
- - Non-GAAP revenue before effects of foreign exchange $
35,320 $ 38,951 -9.3% $ 150,234 $ 152,989 -1.8% Acquisition-related
revenue - OFS (977) - - (977) - - Intercompany eliminations - OFS -
(45) - - (45) - Non-GAAP revenue * $
34,343 $ 38,906 -11.7% $ 149,257 $ 152,944
-2.4% * Also referred to in this news release as organic
revenue
Interactive Data Fixed Income Analytics Revenue
Before Effects of Foreign Exchange Unaudited (In
thousands)
Three Months Ended Twelve Months Ended December
31, December 31, 2009 2008
Change 2009 2008 Change
Interactive Data Fixed Income Analytics revenue $ 8,563 $ 8,458 1.2
% $ 33,156 $ 32,846 0.9 % Effects of foreign exchange $ (3 )
$ - - $ 46 $ - - Non-GAAP
revenue * $ 8,560 $ 8,458 1.2 % $ 33,202
$ 32,846 1.1 % * Also referred to in this news
release as organic revenue
eSignal Revenue Before Effects
of Foreign Exchange Unaudited (In thousands)
Three Months
Ended Twelve Months Ended December 31,
December 31, 2009 2008
Change 2009 2008 Change
eSignal revenue $ 20,596 $ 22,178 -7.1% $ 83,375 $ 88,903 -6.2%
Effects of foreign exchange (117) - - 1,677 -
- Non-GAAP revenue * $ 20,479 $ 22,178 -7.7% $
85,052 $ 88,903 -4.3% * Also referred to in this news
release as organic revenue
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (CONTINUED)
Revenue by Geography Before
Effects of Foreign Exchange, Acquisition-Related Revenue
and Related Intercompany
Eliminations Resulting from Acquisitions
Unaudited (In thousands)
Three Months Ended Twelve Months
Ended December 31, December 31, 2009
2008 Change 2009
2008 Change Revenue by Geography North America
$ 134,635 $ 138,224 -2.6 % $ 532,018 $ 529,586 0.5 % Europe 51,254
51,215 0.1 % 193,682 202,554 -4.4 % Asia-Pacific 8,211
4,653 76.5 % 31,518
18,401
71.3
% Total revenue $ 194,100 $ 194,092 0.0
% $ 757,218 $ 750,541 0.9 %
Three Months Ended Twelve Months Ended
December 31, December 31, Revenue by Geography as a
percentage of revenue
2009 2008
Change 2009 2008 Change
North America 69.4 % 71.2 % -1.8 % 70.3 % 70.6 % -0.3 % Europe 26.4
% 26.4 % 0.0 % 25.6 % 27.0 % -1.4 % Asia-Pacific 4.2 %
2.4 % 1.8 % 4.2 % 2.5 %
1.7 % Total revenue 100.0 % 100.0 %
0.0 % 100.0 % 100.0 % 0.0 %
Three Months Ended Twelve Months Ended
December 31, December 31, 2009
2008 Change 2009 2008
Change Revenue - North America $ 134,635 $ 138,224
-2.6 % $ 532,018 $ 529,586 0.5 % Acquisition-related revenue - OFS
(977 ) - - (977 ) - - Intercompany eliminations - OFS - (72 ) - -
(72 ) - Intercompany eliminations - NTT DATA Financial -
(1,250 ) - -
(5,076 ) - Non-GAAP revenue* $ 133,658
$ 136,902 -2.4 % $ 531,041
$ 524,438 1.3 % * Also referred to in this
news release as organic revenue
Three Months Ended
Twelve Months Ended December 31, December 31,
2009 2008 Change 2009
2008 Change Revenue - Europe 51,254
51,215 0.1 % 193,682 202,554 -4.4 % Effects of foreign exchange
(3,181 ) - -
28,192 - - Non-GAAP
revenue before effects of foreign exchange $ 48,073 $ 51,215 -6.1 %
$ 221,874 $ 202,554 9.5 % Acquisition-related revenue - Kler's
- - (5,984
) - Non-GAAP revenue* $ 48,073
$ 51,215 -6.1 % $ 215,890
$ 202,554 6.6 % * Also referred to in this news
release as organic revenue
Three Months Ended
Twelve Months Ended December 31, December 31,
2009 2008 Change 2009
2008 Change Revenue - Asia Pacific
8,211 4,653 76.5 % 31,518 18,401 71.3 % Effects of foreign exchange
(873 ) - - 916
- - Non-GAAP revenue
before effects of foreign exchange $ 7,338 $ 4,653 57.7 % $ 32,434
$ 18,401 76.3 % Acquisition-related revenue - NTT DATA Financial
(3,398 ) (485 ) (13,397 )
(485 ) Non-GAAP revenue* $ 3,940
$ 4,168 -5.5 % $ 19,037 $ 17,916
6.3 % * Also referred to in this news release as
organic revenue
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(CONTINUED) Total Costs and Expenses Before Effects
of Acquisition-Related Total Costs and Expenses, and Foreign
Exchange Unaudited (In thousands)
Three Months Ended
Twelve Months Ended December 31, December 31,
2009 2008 Change 2009
2008 Change Total costs &
expenses $ 143,698 $ 137,001 4.9% $ 549,469 $ 540,858 1.6%
Effects of foreign exchange (3,936) - - 18,792
- - Total costs & expenses before the effects of
foreign exchange 139,762 137,001 2.0% 568,261 540,858 5.1%
Effects of foreign exchange
primarily related to the revaluation ofoverseas bank balances
(529) 273 - (1,654) 5,102 - Total costs & expenses
before all foreign exchange-related items 139,233 137,274 1.4%
566,607 545,960 3.8% Acquisition-related costs &
expenses Total costs & expenses – OFS (708) - - (708) Total
costs & expenses – NTT DATA Financial (1,939) (387) - (7,011)
(387) - Total costs & expenses – Kler's - - -
(3,219) - - (2,647) (387) - (10,938) (387) -
Non-GAAP total costs & expenses before above factors $ 136,586
$ 136,887 -0.2% $ 555,669 $ 545,573
1.9%
Income from Operations* Before Effects of Acquisitions and
Foreign Exchange Unaudited (In thousands)
Three Months Ended
Twelve Months Ended December 31, December 31,
2009 2008 Change 2009
2008 Change Non-GAAP revenue
before above factors $ 185,671 $ 192,285 -3.4 % $ 765,968 $ 744,908
2.8 % Non-GAAP total costs and expenses before above factors
136,586 136,887 -0.2 % 555,669
545,573 1.9 % Non-GAAP operating profit
from core businesses* $ 49,085 $ 55,398 -11.4 % $
210,299 $ 199,335 5.5 % * Also referred to in
this news release as underlying operating profitability
Reconciliation of Non-GAAP
FINANCIAL Measures (CONTINUED)
Impact of Pension Expense on
Net Income
Unaudited
(In thousands)
Three Months Ended
December 31, 2009 (GAAP)
Adjustment 2009 Non-GAAP REVENUE
$ 194,100 $ - $ 194,100 COSTS AND EXPENSES: Cost of services 62,929
- 62,929 Selling, general and administrative 64,123 (3,428 ) 60,695
Depreciation 8,838 - 8,838 Amortization 7,808
- 7,808 Total costs and expenses
143,698 (3,428 ) 140,270 INCOME
FROM OPERATIONS 50,402 3,428 53,830 Interest income 324
- 324 INCOME BEFORE INCOME TAXES
50,726 3,428 54,154 Income tax expense 17,677
1,195 18,872 NET INCOME $ 33,049 $ 2,233 $
35,282 Less: Net income attributable to noncontrolling interest
- - - NET INCOME
ATTRIBUTABLE TO INTERACTIVE DATA CORPORATION $ 33,049 $ -
$ 35,282
SUPPLEMENTARY DATA Average
Foreign Exchange Rates (1 Local Currency Unit to the U.S.
dollar)
Three Months Ended Twelve
Months Ended December 31, December 31,
2009 2008 $Change %
Change 2009 2008
$Change % Change GBP to USD $ 1.63 $ 1.57 $
0.06 3.8 % $ 1.56 $ 1.85 $ (0.29 ) -15.7 % EUR to USD $ 1.48
$ 1.32 $ 0.16 12.1 % $ 1.39 $ 1.47 $ (0.08 ) -5.4 % AUD to
USD $ 0.91 $ 0.67 $ 0.24 35.8 % $ 0.79 $ 0.85 $ (0.06 ) -7.1 %
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 the 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.
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