Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - INTERACTIVE DATA CORP/MA/ | d575238d8k.htm |
Exhibit 99.1
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Press Release |
INTERACTIVE DATA REPORTS SECOND-QUARTER 2013 RESULTS
BEDFORD, Mass – July 29, 2013 – Interactive Data Corporation today reported its financial results for the second quarter ended June 30, 2013. Interactive Data’s second-quarter 2013 revenue increased 1.7% to $225.1 million from $221.2 million in the second quarter of 2012. Excluding the impact of changes in foreign exchange rates, Interactive Data’s organic (non-GAAP) second-quarter 2013 revenue grew 2.5% from the same quarter last year.
Interactive Data’s second-quarter 2013 income from operations was $49.6 million, a 29.5% increase over income from operations of $38.3 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 2013 increased 3.0% to $88.3 million from $85.7 million in the same quarter one year ago.
“In the face of market conditions that have remained suboptimal, we grew organic revenue, adjusted EBITDA and free cash flow during the second quarter of 2013,” stated Mason Slaine, Interactive Data’s chairman, president and chief executive officer. “Our organic revenue growth in the second quarter of 2013 reflects continued strength in our Pricing and Reference Data segment. We produced strong adjusted EBITDA margins and free cash flow as we balanced prudent expense management with investments to drive product innovation and reengineer our technical infrastructure. In particular, our investment in key product development programs across our business has enabled us to bring a number of enhanced offerings to the marketplace over the past several months, and we are pleased with the response from customers and prospects thus far.”
Segment Reporting and Related Operating Highlights
Pricing and Reference Data Segment:
| • | Interactive Data’s Pricing and Reference Data segment reported second-quarter 2013 revenue of $160.1 million, a 3.7% increase over $154.3 million in the second quarter of 2012. Excluding the impact of changes in foreign exchange rates, second-quarter 2013 organic (non-GAAP) revenue for this segment increased by 4.6% from the same quarter last year. The second-quarter 2013 organic revenue performance primarily reflects continued demand for its evaluated pricing and reference data services product areas in the U.S. over the past several quarters. Over the past several months, this segment expanded its relationships with a number of strategic accounts including Vanguard, which is using Interactive Data to provide indicative net asset values for Vanguard’s European domiciled exchange traded funds. Other second-quarter 2013 highlights included the addition of Hubert Holmes, an experienced industry executive, as managing director of reference data, and key product platforms such as Vantage and BondEdge receiving awards for product excellence and innovation. |
Trading Solutions Segment:
| • | Interactive Data’s Trading Solutions segment generated second-quarter 2013 revenue of $65.0 million, compared with $66.9 million in the same quarter last year. Excluding the impact of changes in foreign exchange rates, second-quarter 2013 organic (non-GAAP) revenue for this segment declined by 2.3% due to lower revenue in both of the segment’s product areas. Despite challenging market conditions, this segment completed several significant sales during the quarter and achieved a number of product development milestones across the segment. Key product highlights included substantial enhancements to the FutureSource workstation, a new suite of application programming interfaces to support its Consolidated Feed and a new mobile tablet version of Market-Q real-time streaming market data desktop. |
Other Second-Quarter 2013 Financial Highlights
Effects of Foreign Exchange:
| • | The net effect of foreign exchange on second-quarter 2013 income from operations was immaterial. |
Balance Sheet Highlights:
| • | As of June 30, 2013, Interactive Data had cash, cash equivalents and short-term investments of $289.3 million, compared with $235.9 million last quarter, $266.1 million at the same time last year and $248.2 million at the end of 2012. The Company’s total debt outstanding as of June 30, 2013 was approximately $2.0 billion. |
First-Half 2013 Results
| • | For the first six months ended June 30, 2013, Interactive Data reported revenue of $448.6 million, an increase of $10.8 million, or 2.5%, from $437.8 million in the same period last year. Excluding the effects of foreign exchange, organic revenue grew by 3.1% during the first half of 2013. |
| • | Interactive Data’s first-half 2013 income from operations was $93.0 million, compared with income from operations of $67.4 million in the same period one year ago. For the first half of 2013, 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 5.7% to $171.4 million from $162.2 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 2013 results on Tuesday, July 30, 2013 at 8:30 a.m. ET. The dial-in number for the conference call is (785) 424-1826 and the related access code is IDCQ213. For those who cannot listen to this broadcast, a replay of the call will be available from July 30 at 12:00 p.m. until Tuesday, August 6, 2013 at 12:00 p.m., and it can be accessed by dialing (402) 220-0398 or (800) 839-1162 (no access code is required).
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. |
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| • | 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. |
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. 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, 2012, 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
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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.
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 |
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INTERACTIVE DATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| REVENUE |
$ | 225,110 | $ | 221,243 | $ | 448,614 | $ | 437,775 | ||||||||
| COSTS AND EXPENSES: |
||||||||||||||||
| Cost of services |
72,903 | 73,789 | 146,793 | 148,463 | ||||||||||||
| Selling, general and administrative |
62,268 | 64,475 | 126,001 | 133,083 | ||||||||||||
| Depreciation |
10,793 | 10,160 | 21,839 | 19,804 | ||||||||||||
| Amortization |
29,546 | 34,517 | 60,976 | 69,074 | ||||||||||||
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| Total costs and expenses |
175,510 | 182,941 | 355,609 | 370,424 | ||||||||||||
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| INCOME FROM OPERATIONS |
49,600 | 38,302 | 93,005 | 67,351 | ||||||||||||
| Interest expense, net |
(34,210 | ) | (37,168 | ) | (69,419 | ) | (74,992 | ) | ||||||||
| Other income, net |
14 | 28 | 347 | 275 | ||||||||||||
| Loss on extinguishment of debt |
— | — | (10,213 | ) | — | |||||||||||
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| INCOME (LOSS) BEFORE INCOME TAXES |
15,404 | 1,162 | 13,720 | (7,366 | ) | |||||||||||
| Income tax expense (benefit) |
369 | 1,055 | (447 | ) | 1,319 | |||||||||||
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| NET INCOME (LOSS) |
$ | 15,035 | $ | 107 | $ | 14,167 | $ | (8,685 | ) | |||||||
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INTERACTIVE DATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| June 30, | December 31, | |||||||
| 2013 | 2012 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Assets: |
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| Cash and cash equivalents |
$ | 277,667 | $ | 224,597 | ||||
| Short-term investments |
11,634 | 23,581 | ||||||
| Accounts receivable, net |
144,808 | 134,855 | ||||||
| Prepaid expenses and other current assets |
20,989 | 25,021 | ||||||
| Income tax receivable |
6,251 | 6,253 | ||||||
| Deferred income taxes |
23,689 | 23,396 | ||||||
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| Total current assets |
485,038 | 437,703 | ||||||
| Property and equipment, net |
153,628 | 142,920 | ||||||
| Goodwill |
1,613,575 | 1,640,541 | ||||||
| Intangible assets, net |
1,599,060 | 1,690,652 | ||||||
| Deferred financing costs, net |
37,145 | 44,854 | ||||||
| Other assets |
5,915 | 5,638 | ||||||
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| Total Assets |
$ | 3,894,361 | $ | 3,962,308 | ||||
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| LIABILITIES AND EQUITY | ||||||||
| Liabilities: |
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| Accounts payable, trade |
$ | 15,635 | $ | 17,323 | ||||
| Accrued liabilities |
87,511 | 87,347 | ||||||
| Borrowings, current |
12,663 | 20,258 | ||||||
| Interest payable |
30,587 | 30,310 | ||||||
| Income taxes payable |
1,146 | 5,578 | ||||||
| Deferred revenue |
27,831 | 22,608 | ||||||
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| Total current liabilities |
175,373 | 183,424 | ||||||
| Income taxes payable |
10,337 | 10,992 | ||||||
| Deferred tax liabilities |
594,981 | 604,322 | ||||||
| Other liabilities |
55,666 | 57,816 | ||||||
| Borrowings, net of current portion and original issue discount |
1,955,469 | 1,941,887 | ||||||
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| Total Liabilities |
2,791,826 | 2,798,441 | ||||||
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| Equity: |
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| Common stock |
— | — | ||||||
| Additional paid-in-capital |
1,241,752 | 1,253,821 | ||||||
| Accumulated loss |
(108,395 | ) | (122,562 | ) | ||||
| Accumulated other comprehensive (loss) income |
(30,822 | ) | 32,608 | |||||
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| Total Equity |
1,102,535 | 1,163,867 | ||||||
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| Total Liabilities and Equity |
$ | 3,894,361 | $ | 3,962,308 | ||||
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INTERACTIVE DATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(In thousands)
| Six Months Ended June 30, |
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| 2013 | 2012 | |||||||
| Cash flows from operating activities: |
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| Net Income (Loss) |
$ | 14,167 | $ | (8,685 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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| Depreciation and amortization |
82,815 | 88,878 | ||||||
| Amortization of deferred financing costs and accretion of notes discounts |
8,140 | 8,929 | ||||||
| Deferred income taxes |
(2,944 | ) | (12,569 | ) | ||||
| Non-cash stock-based compensation |
1,726 | 1,705 | ||||||
| Non-cash interest expense |
753 | 753 | ||||||
| Provision for doubtful accounts and sales credits |
1,364 | 1,998 | ||||||
| Loss on dispositions of fixed assets |
9 | 13 | ||||||
| Loss on extinguishment of debt |
10,213 | — | ||||||
| Portion of insurance settlement related to property and equipment |
(2,485 | ) | — | |||||
| Changes in operating assets and liabilities, net |
(8,411 | ) | (12,048 | ) | ||||
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| NET CASH PROVIDED BY OPERATING ACTIVITIES |
105,347 | 68,974 | ||||||
| Cash flows from investing activities: |
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| Purchase of property and equipment |
(33,881 | ) | (31,890 | ) | ||||
| Proceeds of insurance settlement related to property and equipment |
2,485 | — | ||||||
| Purchase of short-term investments |
(3,335 | ) | (17,548 | ) | ||||
| Proceeds from the sale of short-term investments |
14,236 | — | ||||||
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| NET CASH USED IN INVESTING ACTIVITIES |
(20,495 | ) | (49,438 | ) | ||||
| Cash flows from financing activities: |
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| Principal payments on long-term debt |
(3,649 | ) | (32,029 | ) | ||||
| Principal payments on capital leases |
(198 | ) | (171 | ) | ||||
| Payment of long-term debt issuance costs, net of proceeds |
(1,009 | ) | — | |||||
| Payment of interest rate cap |
(831 | ) | (832 | ) | ||||
| Dividend to parent company |
(14,277 | ) | — | |||||
| Capital contribution resulting from exercise of parent company stock options |
— | 637 | ||||||
| Capital reduction resulting from cash distribution to option holders |
(322 | ) | — | |||||
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| NET CASH USED IN FINANCING ACTIVITIES |
(20,286 | ) | (32,395 | ) | ||||
| Effect of change in exchange rates on cash and cash equivalents |
(11,496 | ) | (660 | ) | ||||
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| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
53,070 | (13,519 | ) | |||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
224,597 | 262,152 | ||||||
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| CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ | 277,667 | $ | 248,633 | ||||
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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 | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||||||||||
| Revenue |
$ | 225,110 | $ | 221,243 | 1.7 | % | $ | 448,614 | $ | 437,775 | 2.5 | % | ||||||||||||
| Total effects of foreign exchange |
1,682 | — | — | 2,574 | — | — | ||||||||||||||||||
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| Total organic (non-GAAP) revenue |
$ | 226,792 | $ | 221,243 | 2.5 | % | $ | 451,188 | $ | 437,775 | 3.1 | % | ||||||||||||
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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 | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||||||||||
| Pricing and Reference Data Revenue |
$ | 160,103 | $ | 154,337 | 3.7 | % | $ | 317,579 | $ | 303,997 | 4.5 | % | ||||||||||||
| Effects of foreign exchange |
1,329 | — | — | 2,040 | — | — | ||||||||||||||||||
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| Total organic (non-GAAP) revenue |
$ | 161,432 | $ | 154,337 | 4.6 | % | $ | 319,619 | $ | 303,997 | 5.1 | % | ||||||||||||
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Interactive Data Trading Solutions Segment
Organic (Non-GAAP) Revenue
(Revenue Before Effects of Deferred Revenue Adjustment and Foreign Exchange)
(In thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||||||||||
| Trading Solutions Revenue |
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| Real-Time Feeds and Trading Infrastructure Services |
$ | 27,034 | $ | 27,638 | -2.2 | % | $ | 54,636 | $ | 54,865 | -0.4 | % | ||||||||||||
| Hosted Web Applications and Workstations |
37,973 | 39,268 | -3.3 | % | 76,399 | 78,913 | -3.2 | % | ||||||||||||||||
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| Total Trading Solutions Revenue |
$ | 65,007 | $ | 66,906 | -2.8 | % | $ | 131,035 | $ | 133,778 | -2.1 | % | ||||||||||||
| Effects of foreign exchange |
353 | — | — | 534 | — | — | ||||||||||||||||||
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| Total organic (non-GAAP) revenue |
$ | 65,360 | $ | 66,906 | -2.3 | % | $ | 131,569 | $ | 133,778 | -1.7 | % | ||||||||||||
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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 | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net Income (Loss) |
$ | 15,035 | $ | 107 | $ | 14,167 | $ | (8,685 | ) | |||||||
| Interest expense |
34,210 | 37,168 | 69,419 | 74,992 | ||||||||||||
| Other income, net |
(14 | ) | (28 | ) | (347 | ) | (275 | ) | ||||||||
| Income tax expense (benefit) |
369 | 1,055 | (447 | ) | 1,319 | |||||||||||
| Depreciation and amortization |
40,339 | 44,677 | 82,815 | 88,878 | ||||||||||||
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| EBITDA |
$ | 89,939 | $ | 82,979 | $ | 165,607 | $ | 156,229 | ||||||||
| Adjustments: |
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| Non-cash stock-based compensation |
874 | 874 | 1,726 | 1,705 | ||||||||||||
| Other non-recurring charges2 |
818 | 351 | 12,600 | 1,160 | ||||||||||||
| Other (income) charges3 |
(3,335 | ) | 1,534 | (8,497 | ) | 3,066 | ||||||||||
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| Total Adjustments |
(1,643 | ) | 2,759 | 5,829 | 5,931 | |||||||||||
| Adjusted EBITDA |
$ | 88,296 | $ | 85,738 | $ | 171,436 | $ | 162,160 | ||||||||
| Adjusted EBITDA Margin4 |
39.2 | % | 38.8 | % | 38.2 | % | 37.0 | % | ||||||||
| Other Adjustments |
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| Pro forma cost savings5 |
7,500 | 7,500 | 15,000 | 15,000 | ||||||||||||
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| Pro Forma Adjusted EBITDA |
$ | 95,796 | $ | 93,238 | $ | 186,436 | $ | 177,160 | ||||||||
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| Pro Forma Adjusted EBITDA Margin4 |
42.6 | % | 42.1 | % | 41.6 | % | 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 ($10.2 million in the six months ended June 30, 2013), facility consolidation costs, and certain severance and retention expenses. |
| 3 | Other (income) charges include insurance recoveries, management fees, earn-out revaluation expense, non-cash foreign exchange expense, acquisition-related adjustments, professional fees related to the registration of the Company’s debt securities, and other costs. The primary changes from 2012 to 2013 are driven by the non-cash foreign exchange expense and insurance recoveries related to Hurricane Sandy. |
| 4 | Adjusted EBITDA margin and pro forma adjusted EBITDA margin are calculated by dividing each EBITDA measure by total revenue. |
| 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. |
9
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 |
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| September 30, | December 31, | March 31, | June 30, | June 30, | ||||||||||||||||
| 2012 | 2012 | 2013 | 2013 | 2013 | ||||||||||||||||
| Net Income (Loss) |
$ | 18,042 | $ | (8,340 | ) | $ | (868 | ) | $ | 15,035 | $ | 23,869 | ||||||||
| Interest expense |
37,372 | 37,162 | 35,209 | 34,210 | 143,953 | |||||||||||||||
| Other income, net |
(329 | ) | (220 | ) | (333 | ) | (14 | ) | (896 | ) | ||||||||||
| Income tax (benefit) expense |
(18,357 | ) | (830 | ) | (816 | ) | 369 | (19,634 | ) | |||||||||||
| Depreciation and amortization |
44,812 | 45,806 | 42,476 | 40,339 | 173,433 | |||||||||||||||
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| EBITDA |
$ | 81,540 | $ | 73,578 | $ | 75,668 | $ | 89,939 | $ | 320,725 | ||||||||||
| Adjustments: |
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| Non-cash stock-based compensation |
875 | 11,528 | 852 | 874 | 14,129 | |||||||||||||||
| Other non-recurring charges2 |
1,067 | 6,126 | 11,782 | 818 | 19,793 | |||||||||||||||
| Other charges (income)3 |
3,335 | 2,420 | (5,162 | ) | (3,335 | ) | (2,742 | ) | ||||||||||||
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| Total Adjustments |
5,277 | 20,074 | 7,472 | (1,643 | ) | 31,180 | ||||||||||||||
| Adjusted EBITDA |
$ | 86,817 | $ | 93,652 | $ | 83,140 | $ | 88,296 | $ | 351,905 | ||||||||||
| Adjusted EBITDA Margin4 |
39.8 | % | 41.8 | % | 37.2 | % | 39.2 | % | 39.5 | % | ||||||||||
| Other Adjustments |
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| Pro forma cost savings5 |
7,500 | 7,500 | 7,500 | 7,500 | 30,000 | |||||||||||||||
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| Pro Forma Adjusted EBITDA |
$ | 94,317 | $ | 101,152 | $ | 90,640 | $ | 95,796 | $ | 381,905 | ||||||||||
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| Pro Forma Adjusted EBITDA Margin4 |
43.3 | % | 45.1 | % | 40.6 | % | 42.6 | % | 42.9 | % | ||||||||||
| 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 ($10.2 million in the six months ended June 30, 2013), facility consolidation costs, and certain severance and retention expenses. |
| 3 | Other (income) charges include insurance recoveries, management fees, earn-out revaluation expense, non-cash foreign exchange expense, acquisition-related adjustments, professional fees related to the registration of the Company’s debt securities, and other costs. The primary changes from 2012 to 2013 are driven by the non-cash foreign exchange expense and insurance recoveries related to Hurricane Sandy. |
| 4 | Adjusted EBITDA margin and pro forma adjusted EBITDA margin are calculated by dividing each EBITDA measure by total revenue. |
| 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 | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||||||||||
| Adjusted EBITDA |
$ | 88,296 | $ | 85,738 | 3.0 | % | $ | 171,436 | $ | 162,160 | 5.7 | % | ||||||||||||
| Capital Expenditures |
17,527 | 17,270 | 1.5 | % | 33,881 | 31,890 | 6.2 | % | ||||||||||||||||
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| Free Cash Flow |
$ | 70,769 | $ | 68,468 | 3.4 | % | $ | 137,555 | $ | 130,270 | 5.6 | % | ||||||||||||
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10