Where we are and where we are going

In recent years, Interactive Data has grown steadily through a combination of acquisitions and organic expansion to establish itself as one of the world’s largest providers of financial information. With a customer base that includes many of the world’s largest and most innovative financial institutions, a direct presence that extends across more than 30 offices on four continents, and an extensive network of redistributors around the world, Interactive Data’s offerings play an invaluable role in support of critical applications across the front, middle and back office of financial institutions.

Interactive Data moves forward as a trusted, tier-one provider of mission critical market data, analytics and related solutions relied upon by financial institutions worldwide for use across their enterprises. With its global distribution channels, extensive content and a fortified technical infrastructure, Interactive Data continues to innovate and deliver high-quality offerings and responsive support to address its customers’ needs. 

The 2,400 people of Interactive Data share a common culture where a relentless focus on addressing customer needs has produced long-term, enduring client relationships. Having integrated numerous acquisitions over the past decade and extended its reach across Europe and the Asia-Pacific region, today’s Interactive Data is focused on leveraging its vast array of content, capabilities and distribution channels. As a result, we are continually advancing the way we collect, process and derive financial market data and deliver our services, analytics and related solutions to customers.

Having built a strong reputation for high-quality content, reliable service delivery and responsive support, Interactive Data is innovating to develope new offerings and capabilities that are aimed at continuing to help customers adapt to powerful, dynamic trends affecting their businesses such as heightened scrutiny on their valuation processes, increased regulation, the proliferation of automated trading systems and the need to differentiate their wealth management platforms. With a strong financial foundation, Interactive Data has the resources to fund critical development projects, enhance its technical infrastructure and add new capabilities and content in ways that will further fortify the trust it has earned with customers around the world.

Financial Highlights


in thousands, except per share data
    2006   2007*   2008**
Revenue $ 612,403 $ 689,610 $ 750,541
Income from operations $ 144,565 $ 175,620 $ 209,683
Net income $ 93,362 $ 125,983 $ 142,648
Diluted earnings per share $ 0.98 $ 1.30 $ 1.48
Cash dividends declared per common share $ 0.80 $ 1.15 $ 0.65
Diluted weighted average shares outstanding $ 95,600 $ 97,060 $ 96,674
Net cash provided by operating activities $ 173,565 $ 184,562 $ 196,242

* Of the $1.15 in cash dividends declared per common share for the year ended December 31, 2007, $0.50 per share was declared and paid in 2007. On December 11, 2007, the Board of Directors declared a special dividend of $0.50 per common share, which was paid on January 24, 2008 to stockholders of record on January 4, 2008, and a regular quarterly dividend of $0.15 per common share, which was paid on March 30, 2008 to stockholders of record on March 3, 2008.

** In total, $1.10 in cash dividends per common share was paid in 2008, of which $0.65 in cash dividends per common share was declared in 2007 and $0.45 per common  share was declared in 2008. On December 5, 2008, the Board of Directors declared a regular quarterly dividend of $0.20 per common share, which was paid on March 31, 2009 to stockholders of record on March 2, 2009.

Income From Operations Revenue chart
Net Income chart Net Cash


Revenue Details

in thousands, except percent data
    2006*   2007**   2008***

Institutional Services

   Interactive Data Pricing
    and Reference Data
$ 377,896 $ 429,420 $ 475,803
   Interactive Data Real-Time
$ 120,061 $ 139,385 $ 152,989
   Interactive Data Fixed
    Income Analytics
$ 32,459 $ 32,442 $ 32,846
Institutional Services total $ 530,416 $ 601,247 $ 661,638
Percent of total revenue $ 86.6% $ 87.2% $ 88.2%

Active Trader Services

   eSignal $ 81,987 $ 88,363 $ 88,903
Active Trader Services total $ 81,987 $ 88,363 $ 88,903
Percent of total revenue $ 13.4% $ 12.8% $ 11.8%
Total revenue $ 612,403 $ 689,610 $ 750,541

* Revenue for the eSignal business in 2006 included $10,045 associated with the Quote.com business that we acquired in March 2006. Revenue for the Interactive Data Real-Time Services business in 2006 included incremental revenue of $41,733 related to the IS.Teledata business we acquired in December 2005.

** Revenue for the eSignal business in 2007 included incremental revenue of $2,372 related to the Quote.com business we acquired in March 2006. Revenue for the Interactive Data Pricing and Reference Data business in 2007 included $5,299 related to the Xcitek business we acquired in May 2007.

*** Revenue for the Interactive Data Pricing and Reference Data business in 2008 included $3,617 related to the Kler’s and NDF businesses we acquired in August 2008 and December 2008, respectively, as well as incremental revenue of $3,058 related to the Xcitek business we acquired in May 2007.

Revenue chart Income From Operations
Net Income chart eSignal



Dear Fellow Shareholder:

Stuart Clark Former President and Chief Executive OfficerHaving served as Interactive Data’s president and chief executive officer since the February 2000 merger with publicly traded Data Broadcasting Corporation until just prior to the production and delivery of this annual report, I felt it would be important to share my thoughts about Interactive Data’s performance in 2008 and express my confidence about the Company’s future.

Interactive Data posted record results in 2008 as our business grew strongly during a year marked by unprecedented turbulence across the broader financial markets, which in turn is reshaping the financial services industry that we primarily target. We made considerable progress in further fortifying and expanding our institutional customer relationships, extending our geographic reach outside of North America and putting in place the leadership succession plans and organizational framework that we believe will position Interactive Data for prosperity well into the future.

Our growth during 2008 was primarily driven by four powerful trends that we believe will be enduring, even in difficult market conditions. These trends encompass the heightened scrutiny around the valuation of securities; increased regulation and its associated impact on risk management and compliance; increasing adoption of low latency data and related solutions to power automated trading systems; and the continued need to differentiate wealth management offerings in order to attract high net worth customers. Our success in the past year was influenced by our efforts to position the capabilities across our organization to help our clients address these trends. Through both investment in internal development and acquisition, we have added new capabilities, brought innovative new offerings and product enhancements to the marketplace, and expanded the data content within our services. We are well positioned to continue helping our customers in this way. 

Today’s Interactive Data moves forward with the requisite scale in terms of the content, technology, distribution channels, support resources, financial strength and everything else that has enabled us to earn the trust of our institutional customers around the world. That trust serves as the foundation upon which we can work collaboratively with our customers and it underpins our ability to win new business within their organizations.

Financial Review

Interactive Data’s financial performance in 2008 was excellent, particularly when viewed against market conditions that became increasingly more challenging during the second half of the year. Revenue grew 8.8% to $750.5 million in 2008 primarily as a result of sustained global demand for our evaluations, reference data and real-time datafeeds, as well as strong revenue growth in the U.S. for our managed solutions offerings. We remained diligent about controlling costs while directing investment into areas of our business that we believe will continue to deliver attractive returns. Net income grew 13.2% to $142.6 million, or $1.48 per diluted share, due primarily to ongoing improvements to our operating profitability, which more than offset lower interest income and a higher effective tax rate in 2008 compared with 2007.

Interactive Data has historically managed its business with an emphasis on generating high levels of net cash provided by operating activities. This was certainly the case in 2008 as we generated $196.2 million in cash from operations. We completed two acquisitions totaling a net of $43.7 million that served to substantially increase our presence in two key international markets while also making capital investments totaling $45.5 million to enhance our technical infrastructure and advance product development. We also returned $103.6 million to shareholders through our regular quarterly dividend and a special dividend, and spent $52.5 million on our stock repurchase program.

Highlights from 2008 and into 2009

One Company, One Vision Several years ago, we began the process of gradually evolving our organizational structure to a more centralized approach from one that was largely decentralized with branding, sales, marketing, product development and support activities being conducted at a business unit level. As we’ve grown and gained scale, operating as “one company” has become a driving theme within our Company. We view our “One Company, One Vision” initiative as a key to accelerating innovation, enhancing our existing services, strengthening our technical infrastructure and building stronger relationships with our customers.

During the past year, we made important progress with our “One Company, One Vision” initiative. In that regard, we completed our efforts that began in 2007 to unify all of our institutionally oriented businesses under a single management structure. From a client-facing perspective, we integrated the previously separate Pricing and Reference Data, and Real-Time Services sales teams. We also expanded the number of customers we managed as part of our Major Accounts Group, which provides centralized sales, account management and support to many of our largest and most strategic institutional customers. In addition, we took steps last year, including the appointment of a chief technology officer, to more tightly coordinate our development, information technology and operations resources.

International Expansion and Acquisitions Interactive Data services an expansive global base of thousands of institutional customers and nearly 55,000 active trader subscribers. In 2008, we continued to grow our institutional business in the European and Asia-Pacific regions, both organically and through acquisition. Although certain economies in those regions slowed in 2008, we continued to take advantage of attractive growth opportunities as a result of the trends cited earlier and drove strong adoption of our evaluated pricing, reference data and real-time datafeed services.

interactive content In August 2008, Interactive Data acquired Kler’s Financial Data Service S.r.l. (Kler's), a leading provider of reference data to the Italian financial industry. This acquisition represented an important element in Interactive Data's strategy to expand its reference data services and to continue increasing its direct presence across continental Europe.

Kler's, which has been renamed as Interactive Data Kler’s and is based in Rome, provides most major Italian banks and custodians with comprehensive, high-quality reference data, including corporate actions and taxation information, on Italian and international securities, with coverage of equities, listed and unlisted Italian bonds, funds, simple derivatives and warrants. Kler's services are available as a downloadable datafeed for back-office applications or via an online browser that enables clients to search, design reports and perform analysis.interactive content

At the same time, we completed two acquisitions that give us a more substantial direct presence in Italy and Japan, two markets that we believe present attractive growth opportunities. We ended 2008 with 29.4% of our revenue generated outside of North America — and we will continue to fund initiatives aimed at growing our presence abroad.

Innovation and Product Development Interactive Data continued to enhance its existing offerings and develop new ones. In our Pricing and Reference Data business, we’ve continued to expand the universe of instruments we cover by adding new asset classes. Related to this, we established an exclusive strategic alliance with Prism Valuation, a small but highly innovative firm that specializes in valuations of complex OTC derivatives and structured products. In addition to redistributing Prism’s services, we also made a minority investment in this company. At our Real-Time Services business, we kept pace with continuing surges in market data volumes, added new market sources and brought additional services to the marketplace. In Fixed Income Analytics, we advanced development of the next-generation version of our flagship BondEdge® offering. At  eSignal, we added new features and capabilities with an emphasis on those features that can help us drive adoption of the eSignal  platform within the U.S. regional brokerage market. We also continued efforts to drive collaboration on product development initiatives across our Company.

Leadership Succession Interactive Data has always prided itself on having a strong and deep bench of talented, experienced executives and managers. During the past year, we added to our team by appointing a number of important business, sales and operations leaders. We also put a CEO succession plan in place to provide for an orderly transition of leadership as a result of my plans to retire later this year. We completed this transition when Ray D’Arcy, who has held a variety of senior sales leadership roles during his 30-year tenure at Interactive Data, became the Company’s president and chief executive officer at the beginning of March. As I have stressed during the past year, my decision to retire has nothing to do with my feelings about the future of our business. I am, in fact, more confident about our prospects than at any other time in my career. I have been fortunate in working for Interactive Data for 40 years, and it is the right time for me to move on to another phase in my life.

interactive content Ray D'Arcy became president and chief executive officer of Interactive Data Corporation in March 2009. Mr. D'Arcy has served in a variety of executive roles during his three decades with Interactive Data Corporation.

Prior to being appointed president and chief executive officer, Mr. D'Arcy was president of Interactive Data's sales and marketing organization. In this role, Mr. D'Arcy has led the unification of Interactive Data's two largest institutional sales, account management and client service organizations, and played an instrumental role in refining and building the Interactive Data brand across the Company's Institutional Services segment. During his tenure with Interactive Data, Mr. D'Arcy has been successful in driving new sales, championing the introduction of innovative new offerings, and building enduring relationships with many of the world's foremost financial institutions.interactive content

I have known Ray for more than 20 years and think he is an excellent choice to be the Company’s next leader. I brought Ray on to my senior management team after I became Interactive Data’s leader in 1995, and he did an outstanding job in directing the market-facing side of our institutional business through 13 consecutive years of growth. Since Ray’s selection by our Board, I worked closely with him to ensure a seamless, orderly transition. I encourage you to read Ray’s commentary on our business and its future within this year’s annual report.


Despite slowing economies around the world and a weakened financial services landscape that has been altered by major customer consolidations, we remain confident about our ability to continue to help our customers address the powerful trends affecting their businesses. Going forward, we expect that customers will be understandably cautious about their spending plans for market data and related services.

Parting Thoughts

Recognizing that this will be my last shareholder letter, I wanted to express my gratitude to those who have helped me in my career at Interactive Data, and helped make our Company what it is today. Interactive Data is a fantastic company, composed of great people who have instilled an outstanding culture. I am very proud of all that we’ve achieved, especially during the past 13 years as Interactive Data established itself as a tier-one player in our industry. And as proud as I am about what we’ve accomplished, I am equally as enthusiastic about our future.

The progress and achievements during the past year did more than just contribute to another year of impressive results; they helped fortify the foundation upon which we will build future success. I have tremendous confidence that Ray and his management team, with the full support of the Board, will lead the Company to new levels of success.

I would like to thank our employees for their dedication, commitment and hard work in making 2008 another very successful year at Interactive Data. We also thank our customers and business partners for their ongoing commitments to our Company. Finally, I would like to express my sincere appreciation for the support that you, our shareholders, have provided over the years.

I believe that Interactive Data is positioned for continued success and I look forward to seeing what our Company will accomplish next year and beyond.

Stuart Clark

Stuart Clark
Former President and Chief Executive Officer

To Interactive Data’s Shareholders

example graphicOn 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.


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:

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.

interactive content The December 2008 acquisition of an 80% stake in NTT DATA Financial Corporation (NDF) provides Interactive Data with a strong, direct presence in Japan and advances the Company's strategy to expand its business in the Asia-Pacific region.

Based in Tokyo, Japan, NDF is a leading provider of securities pricing, reference data and related services to many Japanese banks, asset and funds management companies, insurance companies, custody banks, trust banks and securities firms. Prior to the acquisition, Interactive Data and NDF were partners in a re-distribution relationship in Japan for more than 14 years, providing financial institutions with global end-of-day securities pricing, evaluations and reference data for clients' mission-critical investment operations, including portfolio valuation and accounting. Interactive Data has changed the name of NDF to Interactive Data Japan KK.

Interactive Data plans to acquire the remaining equity of Interactive Data Japan KK over the coming years.interactive content

Financial Strength
Cash PositionFinally, 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. Due to 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. Given 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.

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.

Ray D'Arcy

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


Around the world, financial institutions continue to turn to Interactive Data to help them address time-sensitive, mission-critical challenges across their enterprises. As a result, Interactive Data moves forward as a trusted, tier-one industry leader that is well positioned to help its customers respond to key trends influencing both their day-to-day operations and overall long-term success. These trends include heightened scrutiny around the valuation of securities; increased regulation and its cascading impact on risk management and compliance; the proliferation of automated trading made possible by low latency data; and the need by financial institutions to differentiate wealth management platforms in order to attract and retain clients. Even during what may be a protracted period of significant stress across many of the world’s major economies and financial markets, these are trends that we believe our customers cannot afford to ignore.

Securities Valuations

Volatility in the equity, credit and alternative investment markets  during 2008 created significant challenges for financial institutions as they strived to determine the value of their holdings across a broad range of asset classes. During this tumultuous period, Interactive Data’s Pricing and Reference Data business distinguished itself as a trusted, independent source of pricing information and evaluationsfor more than 2.8 million fixed income and equity securities.

interactive content What is an evaluation?
An evaluation is our good faith opinion of the price a buyer in the marketplace would pay for a given security (typically in an institutional round lot position) in a current sale. Our evaluations represent an important input that can assist financial institutions in their efforts to value their holdings, particularly for fixed income securities, which may trade infrequently, if at all, in the secondary market. interactive content

As part of our ongoing strategy to address our customers’ evolving needs, we brought new valuation services to the marketplace while continuing to expand the global content that we collect, process, derive and deliver. In August 2008, we broadened the scope of our interest rate swap valuation service — increasing our coverage of this asset class to approximately 95% of the total notional amount of interest rate swaps outstanding. We also added 3:00 pm valuations of this information, complementing our traditional 4:00 pm valuation service. In September 2008, we began working exclusively with Prism Valuation to provide customers with Prism’s valuation services for complex OTC derivatives and structured products. During the year, we also significantly enhanced our innovative Basket Calculation ServiceSM, a web-based offering that calculates intra-day indicative valuations for equity and fixed income exchange traded funds (ETFs), by delivering indicative intra-day valuations for exchange traded notes (ETNs) and values for market indices. As we move forward, we plan to continue expanding our overall securities coverage based on customer demand.

As volatility increased and valuations across certain asset classes fluctuated notably, we continued to respond to the needs of our evaluations customers for greater transparency into how our evaluations are derived. In early 2009, we launched a broad set of information resources to help customers better understand our evaluations, particularly with respect to the potential impact of daily market conditions. We also expanded the information available to help clients prepare for their obligations under Financial Accounting Standards Board’s Statement of Financial Accounting Standards No.157 (“FAS 157”). Going forward, we plan to further expand the scope of our information resources through additional online services that provide greater levels of transparency into our evaluations, including a broader set of content to help customers with their FAS 157 requirements.

Risk Management and Compliance

Reference data — the descriptive information about a security that helps facilitate the timely processing of transactions, support risk management systems and address regulatory and reporting requirements — is taking on an even more strategic role within the workflow of major financial institutions. As new regulatory mandates are implemented and the drive to improve overall efficiency through automation continues, Interactive Data’s reference data content, domain expertise and reliable service delivery are enabling customers to streamline workflows across their enterprises, advance their compliance initiatives, and support their risk management activities.

During 2008, Interactive Data took important steps to broaden its vast reservoir of reference data services. In August, Interactive Data acquired Kler’s Financial Information Service S.r.l., a leading provider of domestic reference data to the Italian financial industry. The content from Kler’s includes corporate actions and taxation information, on Italian and international securities, with coverage spanning equities, listed and unlisted Italian bonds, funds, simple derivatives and warrants. The addition of Italian reference data from Kler’s complements the reference data that we already collect, process and deliver to thousands of financial institutions and redistribution partners around the world. In December, we acquired a majority stake in NTT DATA Financial Corporation, which had served as our redistribution partner in Japan for securities pricing and reference data. Now  operating this business as Interactive Data Japan, we plan to market an even broader range of services to our Japanese customers to help them drive efficiencies across their front, middle and back offices while also helping them comply with evolving regulations.

We also took steps to provide our institutional customers with a greater range of delivery options for our reference data. In addition to offering intra-day services, we accelerated delivery of our start-of-day reference data service for North American equities by seven hours to 1:00 am ET, which is prior to the start of trading in Europe. As a result of providing our reference data earlier in the day, our customers have additional time to build and maintain more precise security master files while facilitating the flow of data through the back, middle and front offices. As we move forward, we see further opportunities to harmonize reference data content used across our organization, such as corporate actions, which will enable us to accelerate service delivery. We also plan to continue efforts to bring new services to market, including our new Business Entity Service that allows customers to support their risk management objectives by analyzing their global exposure to various entities, industries and regions. 

As risk management becomes an ever more critical function within major banks, brokerages, pension funds, and insurance companies, Interactive Data’s BondEdge® represents a powerful front-office tool to manage risks and measure the performance of their diversified portfolios. During the year, we made significant progress advancing our next-generation version of BondEdge. In addition to improved functionality and a more intuitive user interface, Interactive Data is adding a broader range of deployment options, including the introduction of new tools designed to make it easier for a broader range of users to benefit from its robust capabilities, and facilitate tighter integration with complementary asset-liability and risk management solutions.

Automated Trading

In trading rooms around the world, there is a proliferation of sophisticated automated trading systems that rely on complex algorithms to execute the purchase and sale of securities. These algorithmic engines require exceptionally fast delivery of information, typically measured in milliseconds or even less than one millisecond. Interactive Data has established itself as a leading provider of low latency data services that are used by a broad range of financial institutions, trading platforms and financial web portals.

Speed, resiliency and reliable service delivery are fundamental to helping the world’s largest and most innovative institutions with their real-time market data requirements. However, meeting these requirements is further compounded by surging market data volumes resulting from the adoption of algorithmic trading applications, auto-quoting by remote market makers, and the growing appeal of electronic exchanges and other opaque trading venues that anonymously connect buyers and sellers. During 2008, the Company continued its global efforts to reduce the time it takes to collate real-time data from over 450 exchanges and other sources and deliver it to customers.

For major institutions with global trading strategies or smaller regional firms focused on their local marketplaces, it is critical that we continually enhance the breadth and depth of our real-time market coverage. During the past year, we took steps to significantly strengthen our real-time market coverage. In 2008, we added a number of exchanges in the Middle East and Africa, as well as emerging exchanges and trading platforms such as BATS Trading, the operator of the third-largest U.S. equity market, and the Turquoise multilateral trading facility, which provides electronic execution services to buyers and sellers of pan-European equities. Going forward, we plan to continue adding exchanges and other sources with an emphasis on those in Asia as well as the Middle East.

We also continued to broaden our real-time services in 2008.  In August, we introduced PlusFeed SelectSM, a cost-effective, hosted “watch list”-based real-time datafeed service. PlusFeed Select is targeted at a variety of institutions including hedge funds, order management systems, portfolio managers, third party application providers, web sites, and firms that have investment strategies that require access to a modest subset of real-time information across a variety of market sources and asset classes. PlusFeed Select is an extension of PlusFeedSM, Interactive Data’s consolidated high-quality, low latency digital datafeed that powers algorithmic and electronic trading applications. The PlusFeed suite of low latency data services, along with DirectPlusSM, an ultra low latency service that provides access to sub-one millisecond data directly from a major exchange, provides customers with a wide range of real-time services to address their latency sensitive trading needs.

interactive content More about Interactive Data’s real-time services
Complementing our real-time datafeed services is Interactive Data’s PlusTick suite of services, which offers clients a range of fully managed services to help them with the collection and analysis of vast amounts of tick data from leading global markets. This service is designed to assist clients with compliance and regulatory requirements as well as for the development and testing of algorithmic trading and advanced charting applications. interactive content

Going forward, we plan to add new capabilities that are designed to make our real-time offerings even more bandwidth efficient and even easier to integrate into trading room operations as our customers look to migrate from their incumbent providers.

Wealth Management

Around the world, wealth management is taking on a new level of importance due to the sharp downturn in many major global economies and financial markets, as well as trends around pension privatization and an aging baby boomer population that is living longer and edging nearer to retirement. As a result, the competition among leading banks, asset managers and brokerages to attract and retain clients has intensified. As profit margins are squeezed, institutions are reexamining the tools they provide to their advisors, brokers and relationship managers as well as the ones they extend to their end customers. Interactive Data’s range of innovative, cost-effective web-based solutions and workstations can empower institutions to differentiate their offerings, more efficiently support their clients and ultimately increase productivity and profitability.

During the past year, we continued to advance our family of managed solutions offerings that are used to create customized, web-based financial information terminals, portals and applications. For example, in early 2009, we added new features to the Portfolio module used in our PrimePortal offering for creating customized online financial applications. With a host of new Portfolio capabilities, investment advisors, online brokers and financial portals can better develop and monitor investment portfolios, and increase efficiency and quality in key advisory processes. The combination of our customizable PrimeTerminal and eSignal® offerings are enabling us to address a broader range of opportunities in the wealth management sector — including helping regional brokerage firms in the U.S. and private banks across Europe who may be struggling with the rising costs associated with migrating to higher-priced solutions from their incumbent suppliers. As we move forward, we will continue to advance our suite of web-based solutions with new features and capabilities, including new tools designed to enable our customers to advance their in-house development initiatives.

With nearly 55,000 direct subscription terminals around the world, our award-winning eSignal offerings set the standard for active traders, individual investors and investment community professionals seeking high-quality market data platforms with access to a range of powerful decision-support tools. Over the past year, we have added an array of new features to the eSignal suite of offerings. In addition, we introduced eSignal OnDemand specifically for end-of-day traders, as well as new products aimed at helping futures traders identify trading opportunities in the agriculture market. A pioneer in delivering financial information to mobile investors, eSignal also strengthened its QuoTrek® service for Blackberry and other java-enabled mobile devices with new features and 2.5 times more capacity in terms of the number of symbols that can be viewed.

QuoTrek 2.0 as shown operating on a Blackberry mobile device.

Trusted Around the World

By incorporating feedback from our customers to guide and refine key development programs, our value proposition continues to resonate with its customers around the world. As we move forward, we are aligning key functional areas across our Company in order to foster innovation, accelerate time to market, elevate quality to new levels and promote highly responsive support. We also continue to extend our reach globally through an ongoing commitment to build our presence in key local markets through our ongoing sales, development and support initiatives as well as by advancing strategic acquisitions and other key relationships. 

Regardless of the economic climate, Interactive Data has always prided itself on working closely with its institutional customers to better understand their needs, and then investing in the resources required to efficiently and effectively address them. With a vast range of market data services, analytics and related solutions, and proven expertise in understanding the operational workflows of our customers, we are helping our customers worldwide adapt to powerful trends that are impacting their businesses. As a result, we continue to validate the implicit trust that our customers worldwide have placed in our organization.

Global Presence

Revenuee by Geographic location2008 was a year of significant global expansion for Interactive Data. The Company generated strong organic revenue growth globally amid robust demand for its independent fixed income evaluations, comprehensive reference data services, low latency datafeed services and managed solutions. In addition to this success, Interactive Data also completed two strategic acquisitions that provide the Company with a more substantial direct presence in two important regional markets: Italy and Japan.

In August 2008, Interactive Data acquired Kler’s Financial Information Service S.r.l., a leading provider of reference data on Italian securities to the Italian financial community. The reference data content from Kler’s on Italian equities, listed and unlisted Italian bonds, funds, simple derivatives and warrants complements the reference data content that Interactive Data already collects, processes and delivers to thousands of financial institutions and redistribution partners around the world. For customers in Italy, the addition of Interactive Data’s rich global content will further strengthen Kler’s existing offerings, and create opportunities for Interactive Data to develop evaluated pricing for Italian unlisted bonds.

In December 2008, Interactive Data acquired a majority interest in its Japanese redistribution partner, Tokyo-based NTT DATA Financial Corporation (NDF). NDF’s services are widely used in Japan by banks, asset and funds management companies, insurance companies, custody banks, trust banks and securities firms. Renamed as Interactive Data Japan, the combination of NDF’s knowledge of the Japanese market and Interactive Data’s experience in delivering information for millions of global securities every day and robust technology infrastructure creates an opportunity for Interactive Data to directly provide financial institutions in Japan with an even broader range of financial data and services.

Going forward, Interactive Data plans to continue growing its business globally across continental Europe, the Middle East and Asia Pacific by pursuing strategic acquisitions and realigning existing resources with agility and decisiveness to further scale its presence in markets with high-growth potential.

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.

Quarterly Cash Dividend Rate

* The actual declaration of future quarterly dividends, and the establishment of record and payment dates, is subject to final determination by Interactive Data's Board of Directors.

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

Corporate Information

Rona Fairhead“I continue to be impressed by the resilience of Interactive Data’s business, which I believe is a reflection of the Company’s unwavering focus on its customers. The Company produced another year of record results in 2008 and successfully transitioned its leadership during the first quarter of 2009 when Ray D’Arcy succeeded Stuart Clark as president and chief executive officer. The Board would like to express its deep gratitude to Stuart Clark for all he has achieved at Interactive Data and wish him well in retirement. Ray’s 30 years of experience at Interactive Data, including the past two-plus decades leading the Company’s various institutional sales organizations, provides for a great deal of continuity and stability, and further cultivates a customer-centric culture. On behalf of the entire Board, we look forward to working with Ray on the activities and strategies that will drive Interactive Data’s continued success and prosperity well into the future.”

Rona Fairhead, Chairman of the Board

Board of Directors

Rona A. Fairhead 5
Chairman of the Board, Interactive Data Corporation

Chairman and Chief Executive Officer, The Financial Times Group

Raymond L. D’Arcy 5
President and Chief Executive Officer, Interactive Data Corporation

Myra R. Drucker 1, 2, 3, 4
Former Chief Investment Officer, General Motors Trust Bank

Donald P. Greenberg, Ph.D 1, 2, 3, 4
Professor, Cornell University

Caspar J.A. Hobbs
Chief Executive Officer, Mergermarket Group

Philip J. Hoffman 2, 5
Executive Vice President, Pearson plc

Robert C. Lamb, Jr. 1, 4, 5
President and Chief Executive Officer, Tercet Capital LLC

1 Audit Committee
2 Compensation Committee
3 Compensation Subcommittee
4 Independent Committee
5 Nominating and Corporate Governance Committee

Senior Management

Interactive Data Corp. Senior Management Team 2009

Seated, Left to Right:
Chuck Thompson, President, eSignal
Mary Ivaliotis, Vice President and Chief Marketing Officer
Ray D’Arcy, President and Chief Executive Officer
Stuart Clark, Former President and Chief Executive Officer
Lori Hannay, Vice President and Chief Human Resources Officer
Roger Sargeant, Managing Director, International, Interactive Data

Standing, Left to Right:
Andrew Hajducky, Executive Vice President, Chief Financial Officer and Treasurer
Andrea Loew, Executive Vice President, General Counsel and Corporate Secretary
John King, Chief Operating Officer
Mark Hepsworth, President, Institutional Business
Cort Williams, President, Institutional Sales
Stephan Wolf, Chief Technology Officer
James Farrer, Managing Director, Asia Pacific

Executive Officers

Raymond L. D’Arcy
President and Chief Executive Officer

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

Mark Hepsworth
President, Institutional Business

John L. King
Chief Operating Officer

Andrea H. Loew
Executive Vice President, General Counsel and Corporate Secretary

Cort J. Williams
President, Institutional Sales

Senior Management

James Farrer
Managing Director, Asia Pacific

Lori B. Hannay
Vice President and Chief Human Resources Officer

Mary Ivaliotis
Vice President and Chief Marketing Officer

Roger J. Sargeant
Managing Director, International, Interactive Data

Chuck Thompson
President, eSignal

Stephan Wolf
Chief Technology Officer

Shareholder Information

New York Stock Exchange
Trading Symbol: IDC

Stock Transfer Agent:
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
Phone: 877.777.0800

Independent Registered Public Accountants:
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072
Phone:  617.266.2000

Annual Meeting:
10:00 am ET
Wednesday, May 20, 2009
Four Seasons Hotel Boston
200 Boylston Street
Boston, MA 02116

Investor Relations Contact Information:
Andrew Kramer
Director, Investor Relations
Interactive Data Corporation
32 Crosby Drive
Bedford, MA 01730
Phone: 781.687.8306
Email: investorrelations@interactivedata.com

32 Crosby Drive
Bedford, MA 01730
Phone: 781.687.8500
Fax: 781.687.8005


Other Information

We have included as Exhibits 31 and 32 to our Annual Report on Form 10-K for fiscal year ended December 31, 2008 filed with the Securities and Exchange Commission certificates of the Chief Executive Officer and Chief Financial Officer of the Company certifying the quality of our public disclosure, and we will submit to the New York Stock Exchange a certificate of the Chief Executive Officer, certifying that he is not aware of any violation by us of New York Stock Exchange corporate governance listing standards. 

Important Information Regarding Forward-Looking Statements:
The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This summary annual report and other written and oral statements that we may make from time to time contain such forward-looking statements that set out anticipated results based on our current plans and assumptions. We try, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “seek,” “believe,” and words and terms of similar substance in connection with any discussion of future operating or financial performance. Although we believe we have been prudent in our plans and assumptions, achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, our actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements. Certain of these risks, uncertainties and assumptions are discussed under the heading entitled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2008, which is included as part of this annual report to shareholders. Such discussion of potential risks and uncertainties is by no means complete but is designed to highlight important factors that may impact forward-looking statements. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.