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Exhibit 99.1

 

LOGO  

Press Release

 

INTERACTIVE DATA REPORTS SECOND-QUARTER 2012 RESULTS

BEDFORD, Mass – July 26, 2012 – Interactive Data Corporation today reported its financial results for the second quarter ended June 30, 2012. Interactive Data’s second-quarter 2012 revenue increased 2.3% to $221.2 million from $216.3 million in the second quarter of 2011. Revenue in the second quarter of 2011 was reduced by $0.3 million due to the purchase accounting for the amortization of acquisition-related deferred revenue. Excluding this adjustment and the impact of changes in foreign exchange rates, Interactive Data’s organic (non-GAAP) second-quarter 2012 revenue grew 3.6% from the same quarter last year.

Interactive Data’s second-quarter 2012 income from operations was $38.3 million, compared with income from operations of $20.2 million in the same quarter one year ago. Non-GAAP adjusted EBITDA (which excludes items that are either not part of the Company’s ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) for the second quarter of 2012 increased 5.0% to $85.7 million from $81.7 million in the same quarter one year ago.

“Interactive Data’s second-quarter 2012 financial performance improved over the same quarter last year and the prior quarter despite challenging market conditions,” stated Mason Slaine, Interactive Data’s chairman, president and chief executive officer. “We continued to generate revenue growth across a number of key product areas due in part to good new sales progress over the past several quarters. At the same time, we have balanced prudent expense control with focused investment in key technology and product-related initiatives. As a result, we converted our revenue growth into higher adjusted EBITDA and produced strong free cash flow. We remain well positioned to support our clients’ needs for high-quality market data and solutions for use across their enterprises.”

Segment Reporting and Related Operating Highlights

As previously disclosed, effective for the fourth quarter of 2011, Interactive Data’s two reportable segments were reorganized as Pricing and Reference Data, and Trading Solutions. The change was made in response to operational and organizational initiatives undertaken during the preceding year and completed in the fourth quarter of 2011, and reflects the way the Company currently approaches the market and analyzes operating performance. The Pricing and Reference Data segment represents the Company’s evaluated pricing, reference data and fixed income analytics product areas. The Trading Solutions segment represents the Company’s real-time data feeds, ultra low latency infrastructure services, hosted web applications and workstations. Historical financial results have been reclassified to reflect this change.

Pricing and Reference Data Segment:

 

 

Interactive Data’s Pricing and Reference Data segment reported second-quarter 2012 revenue of $154.3 million, a 4.4% increase over the second quarter of 2011. Excluding the impact of changes in foreign exchange rates and the reduction of $0.2 million in second-quarter 2011 revenue associated with the acquisition-related deferred revenue adjustment, second-quarter 2012 organic (non-GAAP) revenue for this segment increased by 5.1% from the same quarter last year. The second-quarter 2012 organic revenue performance primarily reflects continued expansion in its evaluated pricing and reference data services product areas in the U.S. and Asia Pacific regions, as well as improved performance within its BondEdge Solutions fixed income analytics product area. Earlier this month, the Company extended its long-standing alliance with Japan’s QUICK Corp. under which the Company will provide fixed income data to QUICK’s terminals. Other highlights during the second quarter of 2012 included the introduction of independent evaluations of Credit Default Swaps (CDS) and select CDS Indices, and the launch of BondEdge Wealth Manager, a new offering designed specifically to provide investment advisors with capabilities to more effectively manage fixed income portfolio strategies.


Trading Solutions Segment:

 

 

Interactive Data’s Trading Solutions segment generated second-quarter 2012 revenue of $66.9 million, compared with $68.6 million in the same quarter last year. Excluding the impact of changes in foreign exchange rates and the reduction of $0.1 million in second-quarter 2011 revenue associated with the acquisition-related deferred revenue adjustment, second-quarter 2012 organic (non-GAAP) revenue for this segment was essentially unchanged. Lower revenue within the real-time feeds product area was offset primarily by continued growth in the Interactive Data 7ticks trading infrastructure services area and hosted web applications area. During the second quarter of 2012, the Company continued to add new content and functionality into its FutureSource and Market-Q offerings for the energy and commodities, and wealth management markets, respectively. In addition, Interactive Data’s two new ticker plants in Hong Kong went live during the second quarter.

Other Second-Quarter 2012 Financial Highlights

Effects of Foreign Exchange:

 

 

The net effect of foreign exchange on second-quarter 2012 income from operations was positive $0.3 million.

Balance Sheet Highlights:

 

 

As of June 30, 2012, Interactive Data had cash, cash equivalents and short-term investments of $266.1 million, compared with $218.7 last quarter, $188.0 million at the same time last year and $262.2 million at the end of 2011. The Company’s total debt outstanding as of June 30, 2012, was approximately $2.0 billion.

First-Half 2012 Results

 

 

For the first six months ended June 30, 2012, Interactive Data reported revenue of $437.8 million, an increase of $10.0 million, or 2.3%, from $427.8 million in the same period last year. Excluding the effects of foreign exchange and the reduction in revenue of $0.9 million associated with the deferred revenue adjustment, organic revenue grew by 3.1% during the first half of 2012.

 

 

Interactive Data’s first-half 2012 income from operations was $67.4 million, compared with income from operations of $37.7 million in the same period one year ago. For the first half of 2012, non-GAAP adjusted EBITDA (which excludes items that are not part of the Company’s ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) increased 2.3% to $162.2 million from $158.5 million in the same period one year ago.

Conference Call Information

Interactive Data Corporation will host a conference call to discuss the Company’s second-quarter 2012 results on Friday, July 27, 2012 at 8:30 a.m. ET. The dial-in number for the conference call is (785) 424-1057 and the related access code is IDCQ212. For those who cannot listen to this broadcast, a replay of the call will be available from July 27 at 12:00 p.m. until Friday, August 3, 2012 at 12:00 p.m., and it can be accessed by dialing (402) 220-7214 or (800) 756-8809 (no access code is required).

 

2


Non-GAAP Information

In addition to presenting our results in accordance with generally accepted accounting principles (GAAP), we also disclose the following non-GAAP information:

 

 

Management includes information regarding organic revenue. Organic revenue excludes the effects of foreign currency exchange rates, adjustments related to the amortization of acquisition-related deferred revenue, and, if applicable, the contribution of businesses recently acquired (and related intercompany eliminations as appropriate). Management believes reporting organic revenue facilitates period-to-period comparisons, and provides a better understanding of underlying business trends and our future revenue growth prospects.

 

 

Management includes organic revenue for our Pricing and Reference Data, and Trading Solutions segments because management believes this additional level of detail provides further insight into underlying performance trends.

 

 

Management includes information regarding earnings before interest, income taxes, depreciation and amortization (EBITDA). We also include information regarding adjusted EBITDA, which we define as earnings before interest, income taxes, depreciation and amortization, stock-based compensation expense, restructuring charges and benefits, adjustments related to the amortization of acquisition-related deferred revenue, and other non-cash, non-operational or non-recurring items. In addition, management also includes information regarding pro forma adjusted EBITDA. We define this metric as earnings, excluding all of the above factors as well as other adjustments permitted under the Company’s senior secured credit facilities. Management considers these measures to be important indicators of the Company’s operational profitability and cash generation strength and a good measure of the Company’s historical operating trend because it eliminates items that are either not part of the Company’s ongoing core operations, do not require a cash outlay, or are not otherwise expected to recur in the ordinary course of business. In addition, the Company’s pro forma adjusted EBITDA measure is based on the definition of EBITDA set forth in the agreements governing the Company’s senior secured credit facilities.

 

 

Management includes information regarding free cash flow, which we define as adjusted EBITDA less capital expenditures. Management considers free cash flow as another important measure of the Company’s cash generation strength that supports the Company’s ability to repay its debt obligations and invest in future growth through new business development activities or acquisitions.

 

 

Management uses these non-GAAP financial measures, in addition to GAAP financial measures, as the basis for measuring the Company’s core operating performance and comparing such performance to that of prior periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making, and for forecasting and planning purposes. In addition, management also considers pro forma adjusted EBITDA to be an important indicator which can be used for the purpose of analyzing covenant compliance under the Company’s senior secured credit facilities.

 

 

The non-GAAP financial measures of the Company’s results of operations included in this press release should not be considered in isolation from comparable measures determined in accordance with GAAP. The non-GAAP financial measures are not meant to be considered superior to or a substitute for the Company’s results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the comparable GAAP financial measures are set forth in the accompanying tables. The non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

 

3


Forward-looking and Cautionary Statements

The following constitutes a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements that involve a number of risks and uncertainties. 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, future challenges and opportunities, including our statements about remaining well positioned to support our clients’ needs for high-quality market data and solutions for use across their enterprises. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, under the caption “Risk Factors.” The Company’s Annual Report on Form 10-K is on file with the Securities and Exchange Commission and available in the “Investors” section of our Website under the heading “SEC Filings.” Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: (i) the implementation of strategies designed to improve revenue and profit growth; (ii) the impact of cost-cutting pressures across the industries we serve; (iii) general worldwide economic conditions and related uncertainties; (iv) consolidation of financial services companies, within and across industries, or the failure of financial institutions; (v) decline in activity levels in the securities markets, weak or declining financial performance of market participants or the failure of market participants; (vi) the intensity of competition we face; (vii) a prolonged outage at one of our data centers or other major disruptions of our computer operations or those of our suppliers; (viii) our ability to maintain relationships with our key suppliers and providers of market data; (ix) our ability to maintain our relationships with service bureaus and custodian banks and our other customers; (x) the need to develop new products and adapt to legal, regulatory, technology or other change; (xi) our cost-savings plans may not be effective or yield the expected efficiencies or may take longer than anticipated; (xii) risks related to our substantial leverage, including our ability to raise additional capital to fund operations or react to changes in the economy or our industry, and our exposure to interest rate risk on our variable rate debt (to the extent the risk is not mitigated by the interest rate hedge and cap arrangements that we may have in place from time to time); (xiii) our ability to negotiate and enter into strategic acquisitions or alliances on favorable terms, if at all, (xiv) our ability to realize the anticipated benefits from any strategic acquisitions or alliances that we enter into; (xv) we are subject to regulatory oversight and we provide services to financial institutions that are subject to regulatory oversight; (xvi) certain of our subsidiaries are subject to complex regulations and licensing requirements; (xvii) the risks of doing business internationally; (xviii) intellectual property related risks, including any allegations that we infringe the intellectual property rights of others; and (xix) our ability to attract and retain qualified management and other key personnel. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change and, therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

 

4


About Interactive Data Corporation

Interactive Data Corporation is a trusted leader in financial information. Thousands of financial institutions and active traders, as well as hundreds of software and service providers, subscribe to our fixed income evaluations, reference data, real-time market data, trading infrastructure services, fixed income analytics, desktop solutions and web-based solutions. Interactive Data’s offerings support clients around the world with mission-critical functions, including portfolio valuation, regulatory compliance, risk management, electronic trading and wealth management. Interactive Data is headquartered in Bedford, Massachusetts and has over 2,500 employees in offices worldwide.

For more information, please visit www.interactivedata.com.

 

COMPANY CONTACTS  
Investors:   Media:
Andrew Kramer   Brian Willinsky
781-687-8306   339-203-0769
andrew.kramer@interactivedata.com   brian.willinsky@interactivedata.com

 

5


INTERACTIVE DATA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In thousands)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012     2011     2012     2011  

REVENUE

   $ 221,243      $ 216,344      $ 437,775      $ 427,800   

COSTS AND EXPENSES:

        

Cost of services

     73,789        75,509        148,463        146,949   

Selling, general and administrative

     64,475        61,621        133,083        126,236   

Depreciation

     10,160        10,594        19,804        20,592   

Amortization

     34,517        48,417        69,074        96,315   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     182,941        196,141        370,424        390,092   
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME FROM OPERATIONS

     38,302        20,203        67,351        37,708   

Interest expense, net

     (37,168     (38,738     (74,992     (80,635

Other income (expense), net

     28        (2,387     275        (2,738

Loss on extinguishment of debt

     —          —          —          (25,450
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

     1,162        (20,922     (7,366     (71,115

Income tax expense (benefit)

     1,055        (10,855     1,319        (33,862
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ 107      $ (10,067   $ (8,685   $ (37,253
  

 

 

   

 

 

   

 

 

   

 

 

 

 

6


INTERACTIVE DATA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

     June 30,
2012
    December 31,
2011
 
     (Unaudited)        
ASSETS     

Assets:

    

Cash and cash equivalents

   $ 248,633      $ 262,152   

Short-term investments

     17,465        —     

Accounts receivable, net

     133,014        118,248   

Prepaid expenses and other current assets

     25,331        27,419   

Income tax receivable

     6,247        6,251   

Deferred income taxes

     34,570        42,281   
  

 

 

   

 

 

 

Total current assets

     465,260        456,351   

Property and equipment, net

     133,944        122,289   

Goodwill

     1,636,598        1,637,126   

Intangible assets, net

     1,748,743        1,818,117   

Deferred financing costs, net

     49,603        54,478   

Other assets

     4,695        5,310   
  

 

 

   

 

 

 

Total Assets

   $ 4,038,843      $ 4,093,671   
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Liabilities:

    

Accounts payable, trade

   $ 16,711      $ 17,911   

Accrued liabilities

     79,013        89,214   

Borrowings, current

     —          56,417   

Interest payable

     30,475        30,584   

Income taxes payable

     21,533        7,008   

Deferred revenue

     30,441        24,944   
  

 

 

   

 

 

 

Total current liabilities

     178,173        226,078   

Income taxes payable

     6,869        10,906   

Deferred tax liabilities

     626,386        647,090   

Other liabilities

     55,786        59,908   

Borrowings, net of current portion and original issue discount

     1,958,226        1,929,784   
  

 

 

   

 

 

 

Total Liabilities

     2,825,440        2,873,766   
  

 

 

   

 

 

 

Equity:

    

Common stock

     —          —     

Additional paid-in-capital

     1,336,091        1,333,344   

Accumulated loss

     (132,264     (123,579

Accumulated other comprehensive income

     9,576        10,140   
  

 

 

   

 

 

 

Total Equity

     1,213,403        1,219,905   
  

 

 

   

 

 

 

Total Liabilities and Equity

   $ 4,038,843      $ 4,093,671   
  

 

 

   

 

 

 

 

7


INTERACTIVE DATA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In thousands)

 

     Six Months Ended
June 30,
 
     2012     2011  

Cash flows from operating activities:

    

Net loss

   $ (8,685   $ (37,253

Adjustments to reconcile net loss to net cash provided by operating activities:

    

Depreciation and amortization

     88,878        116,907   

Amortization of deferred financing costs and accretion of notes discounts

     8,929        9,027   

Deferred income taxes

     (12,569     (39,213

Stock-based compensation

     1,705        1,788   

Non-cash interest expense

     753        —     

Provision (recovery) for doubtful accounts and sales credits

     1,998        (764

Loss on dispositions of fixed assets

     13        126   

Loss on extinguishment of debt

     —          25,450   

Changes in operating assets and liabilities, net

     (12,048     (6,443
  

 

 

   

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

     68,974        69,625   

Cash flows from investing activities:

    

Purchase of property and equipment

     (31,890     (17,885

Business and asset acquisitions, net of acquired cash

     —          19   

Purchase of short-term investments

     (17,548     —     
  

 

 

   

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

     (49,438     (17,866

Cash flows from financing activities:

    

Proceeds from issuance of long-term debt, net of issuance costs

     —          1,358   

Principal payments on long-term debt

     (32,029     (3,363

Principal payments on capital leases

     (171     —     

Proceeds from issuance of restricted parent company common stock

     —          11,850   

Capital contribution resulting from exercise of parent company stock options

     637        —     

Payment of interest rate cap

     (832     —     
  

 

 

   

 

 

 

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

     (32,395     9,845   

Effect of change in exchange rates on cash and cash equivalents

     (660     2,708   
  

 

 

   

 

 

 

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

     (13,519     64,312   

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

     262,152        123,704   
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

   $ 248,633      $ 188,016   
  

 

 

   

 

 

 

 

8


RECONCILIATION OF NON-GAAP MEASURES

Total Organic (Non-GAAP) Revenue

(Revenue Before Effects of Deferred Revenue Adjustment and Foreign Exchange)

(In thousands)

 

                                                                                                                 
     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012      2011      Change     2012      2011      Change  

Revenue

   $ 221,243       $ 216,344         2.3   $ 437,775       $ 427,800         2.3

Total deferred revenue adjustment

     —           260         —          —           901         —     
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Non-GAAP revenue before total deferred revenue adjustment

     221,243         216,604         2.1     437,775         428,701         2.1

Total effects of foreign exchange

     3,130         —           —          4,080         —           —     
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total organic (non-GAAP) revenue

   $ 224,373       $ 216,604         3.6   $ 441,855       $ 428,701         3.1
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Interactive Data Pricing and Reference Data Segment

Organic (Non-GAAP) Revenue

(Revenue Before Effects of Deferred Revenue Adjustment and Foreign Exchange)

(In thousands)

 

                                                                                                                 
     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012      2011      Change     2012      2011      Change  

Pricing and Reference Data Revenue

   $ 154,337       $ 147,765         4.4   $ 303,997       $ 291,904         4.1

Effects of deferred revenue adjustment

     —           150         —          —           600         —     
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Non-GAAP revenue before effects of deferred revenue adjustment

     154,337         147,915         4.3     303,997         292,504         3.9

Effects of foreign exchange

     1,189         —           —          1,555         —           —     
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total organic (non-GAAP) revenue

   $ 155,526       $ 147,915         5.1   $ 305,552       $ 292,504         4.5
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Interactive Data Trading Solutions Segment

Organic (Non-GAAP) Revenue

(Revenue Before Effects of Deferred Revenue Adjustment and Foreign Exchange)

(In thousands)

 

                                                                                                                 
     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012      2011      Change     2012      2011      Change  

Trading Solutions Revenue

                

Real-Time Feeds and Trading Infrastructure Services

   $ 27,638       $ 28,523         -3.1   $ 54,865       $ 56,398         -2.7

Hosted Web Applications and Workstations

     39,268         40,056         -2.0     78,913         79,498         -0.7
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total Trading Solutions Revenue

   $ 66,906       $ 68,579         -2.4   $ 133,778       $ 135,896         -1.6

Effects of deferred revenue adjustment

     —           110         —          —           301         —     
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Non-GAAP revenue before effects of deferred revenue adjustment

   $ 66,906       $ 68,689         -2.6   $ 133,778       $ 136,197         -1.8

Effects of foreign exchange

     1,941         —           —          2,525         —           —     
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total organic (non-GAAP) revenue

   $ 68,847       $ 68,689         0.2   $ 136,303       $ 136,197         0.1
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

9


RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

 

Non-GAAP Adjusted EBITDA and Non-GAAP Pro Forma Adjusted EBITDA1

(In thousands, except margin data)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012     2011     2012     2011  

Net Income (Loss)

   $ 107      $ (10,067   $ (8,685   $ (37,253

Interest expense

     37,168        38,738        74,992        80,635   

Other expense (income)

     (28     2,387        (275     2,738   

Income tax expense (benefit)

     1,055        (10,855     1,319        (33,862

Depreciation and amortization

     44,677        59,011        88,878        116,907   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 82,979      $ 79,214      $ 156,229      $ 129,165   

Adjustments:

        

Stock-based compensation

     874        1,020        1,705        1,788   

Other non-recurring charges2

     351        745        1,160        26,656   

Other charges3

     1,534        704        3,066        913   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjustments

     2,759        2,469        5,931        29,357   

Adjusted EBITDA

   $ 85,738      $ 81,683      $ 162,159      $ 158,522   

Adjusted EBITDA Margin4

     38.8     37.7     37.0     37.0

Other Adjustments

        

Pro forma cost savings5

     7,500        7,500        15,000        15,000   
  

 

 

   

 

 

   

 

 

   

 

 

 

Pro Forma Adjusted EBITDA

   $ 93,238      $ 89,183      $ 177,159      $ 173,522   
  

 

 

   

 

 

   

 

 

   

 

 

 

Pro Forma Adjusted EBITDA Margin4

     42.1     41.2     40.5     40.5

 

1 

Interactive Data’s adjusted EBITDA excludes items that are either not part of the Company’s ongoing core operations, do not require a cash outlay or are not otherwise expected to recur in the ordinary course. In addition to excluding the aforementioned items, Interactive Data’s pro forma adjusted EBITDA also reflects other adjustments permitted under the Company’s senior secured credit facilities. The Company’s pro forma adjusted EBITDA measure is based on the definition of EBITDA set forth in the agreements governing the Company’s senior secured credit facilities. Please note that the sum of certain amounts may not equal the total due to rounding.

2

Other non-recurring charges include the impact of the deferred revenue adjustment, the loss on extinguishment of debt, facility consolidation costs, and certain severance and retention expenses.

3 

Other charges include management fees, earnout-related expense, non-cash foreign exchange expense, acquisition-related adjustments, professional fees related to the registration of the Company’s debt securities, and other costs.

4

Adjusted EBITDA margin and pro forma adjusted EBITDA margin are calculated by dividing each EBITDA measure by non-GAAP revenue (total revenue less deferred revenue adjustment).

5

Pro forma cost savings of up to a maximum of $30 million annually is an adjustment permitted under the Company’s credit agreements for activities that may include, but are not limited to, the consolidation of a number of legacy organizational silos, technology platforms and content databases.

 

10


RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

 

Trailing Four Quarters and Trailing Twelve Months

Quarterly Non-GAAP Adjusted EBITDA and Non-GAAP Pro Forma Adjusted EBITDA1

(In thousands, except margin data)

 

     Three Months Ended     Trailing Twelve
Months Ended
 
     September 30,     December 31,     March 31,     June 30,     June 30,  
     2011     2011     2012     2012     2012  

Net Income (Loss)

   $ 9,848      $ (1,911   $ (8,792   $ 107      $ (748

Interest expense

     38,390        38,095        37,824        37,168        151,477   

Other (income) expense

     (30     1,011        (247     (28     706   

Income tax expense (benefit)

     (17,433     (3,960     264        1,055        (20,074

Depreciation and amortization

     51,141        46,420        44,201        44,677        186,439   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 81,916      $ 79,655      $ 73,250      $ 82,979      $ 317,800   

Adjustments:

          

Stock-based compensation

     952        1,489        831        874        4,146   

Other non-recurring charges2

     2,679        557        809        351        4,396   

Other charges3

     1,814        1,756        1,531        1,534        6,635   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjustments

     5,445        3,802        3,171        2,759        15,177   

Adjusted EBITDA

   $ 87,361      $ 83,457      $ 76,421      $ 85,738      $ 332,977   

Adjusted EBITDA Margin4

     40.1     37.6     35.3     38.8     37.9

Other Adjustments

          

Pro forma cost savings5

     7,500        7,500        7,500        7,500        30,000   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pro Forma Adjusted EBITDA

   $ 94,861      $ 90,957      $ 83,921      $ 93,238      $ 362,977   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Pro Forma Adjusted EBITDA Margin4

     43.5     41.0     38.8     42.1     41.4

 

1 

Interactive Data’s adjusted EBITDA excludes items that are either not part of the Company’s ongoing core operations, do not require a cash outlay or are not otherwise expected to recur in the ordinary course. In addition to excluding the aforementioned items, Interactive Data’s pro forma adjusted EBITDA also reflects other adjustments permitted under the Company’s senior secured credit facilities. The Company’s pro forma adjusted EBITDA measure is based on the definition of EBITDA set forth in the agreements governing the Company’s senior secured credit facilities. Please note that the sum of certain amounts may not equal the total due to rounding.

2

Other non-recurring charges include the impact of the deferred revenue adjustment, the loss on extinguishment of debt, facility consolidation costs, and certain severance and retention expenses.

3 

Other charges include management fees, earnout-related expense, non-cash foreign exchange expense, acquisition-related adjustments, professional fees related to the registration of the Company’s debt securities, and other costs.

4

Adjusted EBITDA margin and pro forma adjusted EBITDA margin are calculated by dividing each EBITDA measure by non-GAAP revenue (total revenue less deferred revenue adjustment).

5

Pro forma cost savings of up to a maximum of $30 million annually is an adjustment permitted under the Company’s credit agreements for activities that may include, but are not limited to, the consolidation of a number of legacy organizational silos, technology platforms and content databases.

Non-GAAP Free Cash Flow

(In thousands)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012      2011      Change     2012      2011      Change  

Adjusted EBITDA

   $ 85,738       $ 81,683         5.0   $ 162,159       $ 158,522         2.3

Capital Expenditures

     17,270         10,093         71.1     31,890         17,885         78.3
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Free Cash Flow

   $ 68,468       $ 71,590         -4.4   $ 130,269       $ 140,637         -7.4
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

11