To Interactive Data’s Shareholders

On March 2, 2009, I became Interactive Data’s president and chief executive officer. Although I am new to this role, I have spent the past 30 years at Interactive Data in a variety of senior management roles. For the past 23 years, I have been focused on leading the teams responsible for driving the Company’s revenue growth, supporting our clients and elevating our position in the financial information industry. With a successful 2008 behind us, I wanted to take this opportunity to offer my perspective on Interactive Data’s current market position, key strengths and what we consider to be our most attractive growth opportunities as we move forward.

Market Leadership

Over the course of my career, Interactive Data has grown organically and through acquisition from a small company with a primary focus on the U.S. marketplace into a global, publicly traded financial information leader with over 2,400 employees committed to delivering a broad range of high-value offerings that span the back, middle and front offices of our institutional customers. Leading our institutional sales and other client-facing teams over the past two decades has reinforced my conviction that Interactive Data’s biggest asset is the trust we have earned with our customers. My objective going forward will be to identify and implement the initiatives required to leverage the position we’ve worked so hard to attain with our customers around the world and create greater value for all of our key stakeholders.

“Focusing on our customers’ high-priority and
mission-critical needs is a key element in successfully navigating the current challenging environment.”

The skill sets and capabilities across Interactive Data are impressive and quite complementary. I strongly believe in the “One Company, One Vision” initiative we’ve put into place in recent years. It enables us to deliver a cohesive, compelling message to the marketplace and it is also important in advancing our efforts to effectively and efficiently respond to our customers’ needs in terms of product development and support. We plan to build upon these efforts in 2009 as we seek to extend our leadership in areas such as evaluations and reference data; maximize the fixed income expertise resident across our organization; drive further adoption of our services in the real-time datafeeds market; and take advantage of our capabilities and offerings to distinguish Interactive Data in the wealth management sector.

We recognize that market conditions in 2009 will likely remain uncertain as we strive to expand our business globally. The U.S. and other major economies are struggling; many of our institutional clients will likely be cautious about their spending on market data and related services, amid overall pressure to contain or reduce costs; and significant merger activity among some of our institutional customers during the past year could impact service downgrades and new sales as they advance their integration efforts. Not withstanding these challenges, we are optimistic about our ability to continue growing in 2009 through a combination of organic expansion and acquisitions.

Reasons for Confidence About Our Future

There are a number of factors that underpin our optimism:

Stability

We operate a strong, stable business with very high levels of recurring institutional revenue upon which we can grow. We closed 2008 on an excellent note in relation to new sales, and renewal rates across our institutionally oriented business were approximately 95% for the year. Focusing on our customers’ high-priority and mission-critical needs is a key element in successfully navigating the current challenging environment. Our goal going forward is to work collaboratively with our customers to help them achieve their business and financial objectives while also expanding our share of their spending on market data services.

Well Positioned

We believe that our customers will continue to invest in key areas of their business that are fundamental to their day-to-day operations and long-term success. We are well positioned to assist our clients in a number of those areas such as valuation, compliance and risk management, trading operations and wealth management. We view the trends influencing spending in these areas as global in scope and long-term in duration, and plan to direct our investment in product development accordingly. We also intend to advance key strategic relationships to gain access to valuable, complementary content and capabilities. With that said, we also plan to remain prudent in the way we manage the cost base of our business while market conditions remain uncertain.

Compelling Value Proposition

Another factor behind our confidence is that today we have a broader range of high-value offerings than ever before. We have taken strides during 2008 and into 2009 to further enhance and expand our offerings by adding new features and functionality that address key customer needs. To that end, although many of our largest direct customers already utilize services from more than one of Interactive Data’s businesses, I believe we have only started to scratch the surface in terms of expanding our cross-selling efforts across our global customer base. As we move forward, we are seeing new opportunities to bring compelling value to clients by matching content and capabilities from across our organization.

Strong Distribution Channels

Our optimism about the future also stems from our success in building very strong distribution channels. In addition to our direct relationships with many of the world’s largest and most influential financial institutions, we have made great strides in recent years to expand our redistribution network of financial software companies, technology solutions providers and infomedia businesses. These redistributors use our data to either power their solutions or address the information needs of their end users. This indirect sales channel has been an area of growth for us, and we are poised to benefit should the trend toward outsourcing intensify.

A Global Customer Base

In addition, today’s Interactive Data supports a global customer base and we continue to see attractive opportunities to expand our business outside the U.S. With nearly thirty percent of our revenue generated abroad in 2008, we’ll look to build on our efforts to grow our business organically in both Europe and the Asia-Pacific region, and complement these efforts with strategic acquisitions. Our acquisitions of Kler’s in Italy and a majority interest in Japan-based NTT DATA Financial substantially increase our direct presence in each of these markets. These transactions also position us to accelerate our progress much faster than we could have if we looked to enter these markets directly.

Financial Strength

Finally, we move forward with a very strong financial foundation. We ended the year with no debt and $228.8 million in cash, cash equivalents and marketable securities. Given this position and the strong cash generation characteristics of our business, we are able to fund both internal initiatives and acquisitions to advance our growth strategy that is oriented toward delivering high-value services, extending our geographic reach and expanding into adjacent markets. Due to the strong cash generation characteristics of our business, our sound balance sheet and continued confidence in our prospects, we also raised our regular quarterly cash dividend by 33.3% to $0.20 per common share in 2009.

Interactive Data has come a long way under Stuart Clark’s leadership to successfully establish itself as a tier-one, trusted provider of financial market data, analytics and related solutions. It is truly an honor for me to follow in his footsteps. During the past 13 years that we’ve worked together, he has been a great leader, supportive colleague and good friend to me. On behalf of all Interactive Data employees, past and present, we are indebted to Stuart for his commitment and contributions to Interactive Data’s success over the course of his career with the Company, and we wish him the best in his retirement.

Interactive Data’s People

One of Interactive Data’s key strengths is its people. Over the years, we have created a customer-centric culture that extends across our global organization. At a time that is likely to be very challenging and stressful for our customers, we recognize that we must be at our very best with regard to their experience in working with our Company. Providing quality service, timely delivery and superior support are important to our success all the time, but they take on particular importance during difficult times. I am confident that my colleagues will once again rise to the challenges that may present themselves in 2009 to assist our customers, and our responsiveness to their needs will again be recognized and rewarded over the long term.

“One of Interactive Data’s key strengths is its people... we recognize that we must be at our very best with regard to our customer's experience when they work with our Company.”

Along with our Board of Directors, the senior management group and all of my colleagues at Interactive Data, I am committed to perpetuating the Company’s success and prosperity well into the future. Looking ahead, I am confident we have the resources in place to achieve our objectives in ways that will deliver tangible value to our shareholders.

I look forward to this same time next year when I will be able to report back to you on what we’ve accomplished.

Raymond D'Arcy
President and Chief Executive Officer
Interactive Data Corporation

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