To My Fellow Interactive Data Shareholders

Andrew Hajducky, EVP, CFO and TreasurerAs you can read further in our Annual Report on Form 10-K,  Interactive Data had a very successful year in 2008 as we made significant progress against our plans.

Revenue in 2008 grew 8.8% to $750.5 million, just eclipsing the three-quarters of billion dollars milestone. Income from operations grew 19.4% to $209.7 million in 2008 as revenue growth outpaced spending. Our expense structure is largely of a fixed cost nature involving intellectual capital, communications infrastructure and data content. As a result, a healthy percentage of every incremental dollar of revenue we generate can be converted into profit. Net income in 2008 grew 13.2% to $142.6 million, or $1.48 per diluted share. Our strong operating performance in 2008 translated into another year of solid net cash provided by operating activities, which increased 6.3% to $196.2 million. The preceding pages detail strategic and operational milestones and accomplishments that supported our financial performance last year.

We continue to use our capital in ways that will facilitate the global expansion of our business as well as return cash to our shareholders. We completed two acquisitions totaling a net of over $43 million that enable us to now have a direct presence in two strategically important international markets, Italy and Japan. Our capital expenditures of $45.5 million were primarily directed to support our infrastructure so that we are best positioned to address our customers’ needs for reliable and timely delivery of high-quality content embedded in our services and solutions.

Our use of capital in 2008 also illustrates our efforts to make Interactive Data more attractive to current and prospective investors by returning cash to shareholders through dividends. We returned 52.8% of the net cash provided by operating activities to shareholders during the past year through the $0.50 per common share special dividend paid in January 2008 and the quarterly dividends that totaled $0.60 per common share in 2008. Recognizing the strength of our balance sheet and the historically impressive cash generation characteristics of our business, our Board authorized a 33.3% increase in our quarterly dividend to $0.20 per common share, starting in 2009. In addition, we spent $52.5 million, or the equivalent of $0.54 per diluted share, during 2008 as part of our ongoing stock repurchase activity. In December 2008, we expanded the scope of the stock buyback program by an additional two million shares.

Clearly, the fact that we increased our quarterly dividend rate during such a turbulent period within our target markets speaks volumes about the confidence we have in our business. Nevertheless, we know that 2009 will present a new set of challenges stemming from the financial crisis that is directly impacting our customers and leading to recessionary climates in many major economies worldwide. Consequently, we intend to be prudent about our spending by directing our investment into areas that we believe are critical to addressing customer needs and supporting our long-term growth aspirations. We plan to be diligent in terms of driving synergies and leveraging the full breadth and depth of our capabilities from across our Company as part of our “One Company, One Vision” activities. With $228.8 million in cash, cash equivalents and marketable securities and no debt, Interactive Data has the resources to advance strategic acquisition and investment opportunities that can further strengthen our business.

Given our historical profit margins, we are passionate in our belief that investing in the expansion of our business, either through acquisition or internal growth initiatives, is the best investment we can make to drive long-term value for our shareholders. At the same time, we also believe that increasing our regular quarterly dividend creates further incentive to reward existing shareholders and attract new ones without constraining our ability to invest in our business.

We have always prided ourselves in presenting our financial statements and reporting on our business with integrity and transparency. Our finance teams around the world collaborate with our colleagues in a variety of disciplines to support the business and maintain sound accounting controls and processes. As we move forward, we endeavor to foster an open, honest dialogue with our shareholders. With that in mind, we encourage you to contact investor relations with any questions or comments.

I look forward to working closely with Ray D’Arcy, the rest of our senior management team, our employees and our Board to help advance Interactive Data’s business, and sharing news of this progress with you.

Andrew Hajducky

Andrew J. Hajducky III
Executive Vice President, Chief Financial Officer and Treasurer