To Interactive Data’s Shareholders

Ray D'Arcy

Reasons for Confidence About Our Future

There are a number of factors that underpin our optimism:


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.

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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.

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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.

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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 interactivesubstantially 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.

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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. interactive 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.

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