##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-K

For Annual and Transition Reports Pursuant to
Sections 13 or 15(d)

of the Securities Exchange Act of
1934


(Mark One)

| |   |                                               | 
| | - | --------------------------------------------- | 
| | þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) | 

| |                                              | 
| | -------------------------------------------- | 
| | OF THE SECURITIES EXCHANGE ACT OF 1934       | 
|
| | For the fiscal year ended December 31,
	2001 | 



| |   |                                                   | 
| | - | ------------------------------------------------- | 
| | o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) | 

| |                                        | 
| | -------------------------------------- | 
| | OF THE SECURITIES EXCHANGE ACT OF 1934 | 

Commission file number 0-20311

INTERACTIVE DATA CORPORATION

(Exact name of registrant as specified in its
charter)


|                                |  |                    
|------------------------------- |  | -------------------
|Delaware                        |  | 13-3668779         
|(State or other jurisdiction of |  | (I.R.S. Employer   
|Incorporation or organization)  |  | Identification No.)

22 Crosby Drive

Bedford, Massachusetts 01730


(Address of principal executive
offices)


Registrants telephone number, including
area code: (781) 687-8800

Securities registered pursuant to
Section 12(b) of the Act: None

Securities registered pursuant to
Section 12(g) of the Act: Common Stock, $.01 par
value

(Title of Class)


Indicate by check mark whether the Registrant:
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days.  Yes  þ  No  o

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of Registrants knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to
this
Form 10-K.     o

As of March 11, 2002, the aggregate market
value of the Common Stock of the Registrant (based upon the
closing transaction price) on such date held by non-affiliates
of the Registrant was approximately $536,054,886.

As of March 11, 2002, there were shares
90,778,310 of Common Stock of the Registrant outstanding.

Documents Incorporated by Reference

Portions of the Proxy Statement to be filed with
the Securities and Exchange Commission in connection with the
Annual Meeting of Stockholders expected to be held in May 2002
are incorporated by reference into Part III hereof.









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TABLE OF CONTENTS



|                                                  |                                                                                                              |  |  |  |  |  |  | 
|------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ |  |  |  |  |  |  | 
|TABLE OF CONTENTS                                
|PART I                                           
|                                                  | Item 1. Description of Business                                                                             
|                                                  | Item 2. Properties                                                                                          
|                                                  | Item 3. Legal Proceedings                                                                                   
|                                                  | Item 4. Submission of Matters to a Vote of Security Holders                                                 
|PART II                                          
|                                                  | Item 5. Market and Prices for Registrants Common Equity and Related Stockholder Matters                    
|                                                  | Item 6. Selected Financial Data                                                                             
|                                                  | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations (in thousands)
|                                                  | Item 7A. Quantitative and Qualitative Disclosures about Market Risk                                         
|                                                  | Item 8. Financial Statements and Supplementary Data                                                         
|                                                  | Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure                
|PART III                                         
|                                                  | Item 10. Directors and Executive Officers of the Registrant                                                 
|                                                  | Item 11. Executive Compensation                                                                             
|                                                  | Item 12. Security Ownership of Certain Beneficial Owners and Management                                     
|                                                  | Item 13. Certain Relationships and Related Transactions                                                     
|PART IV                                          
|                                                  | Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K                                    
|EX-2.4 Asset Sale & Purchase Agreement           
|EX-3.1 Amended Certificate of Incorporation      
|2001 Employee Stock Purchase Plan                
|EX-10.9 2001 Amendment to Emp Stock Purchace Plan
|EX-10.10 Rules of Interactive Data UK 8h Opt Plan
|EX-10.11 Management Services Agreement           
|EX-10.12 The Pearson Reward Plan                 
|EX-10.13 Rules of the 1998 Exec Sh Option Plan   
|EX-10.14 Rules of the 1992 Exec Share Option Plan
|EX-10.15 Pearson Executive Share Option Plan 1998
|EX-10.16 Pearson Annual Bonus Share Matching     
|EX-10.17 Pearson, Inc. Excess Svngs Invest Plan  
|EX-10.18 Pearson, Inc. Supp Exec Retirement Plan 
|EX-21 Subsidiaries                               
|EX-23 Consent of PricewaterhouseCoopers LLP      



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##### Table of Contents






TABLE OF CONTENTS

|         |          |    |                                                                                        |  |   
|-------- | -------- | -- | -------------------------------------------------------------------------------------- |  | --
|PART I   |          | 2 
|         | Item 1.  |    | Description of Business                                                                |  | 2 
|         | Item 2.  |    | Properties                                                                             |  | 8 
|         | Item 3.  |    | Legal Proceedings                                                                      |  | 9 
|         | Item 4.  |    | Submission of Matters to a Vote of Security
	Holders                                   |  | 9 
|PART II  |          | 10
|         | Item 5.  |    | Market and Prices for Registrants Common
	Equity and Related Stockholder Matters      |  | 10
|         | Item 6.  |    | Selected Financial Data                                                                |  | 10
|         | Item 7.  |    | Managements Discussion and Analysis of
	Financial Condition and Results of Operations |  | 12
|         | Item 7A. |    | Quantitative and Qualitative Disclosures about
	Market Risk                            |  | 21
|         | Item 8.  |    | Financial Statements and Supplementary
	Data                                           |  | 22
|         | Item 9.  |    | Changes In and Disagreements With Accountants
	on Accounting and Financial Disclosure  |  | 47
|PART III |          | 47
|         | Item 10. |    | Directors and Executive Officers of the
	Registrant                                    |  | 47
|         | Item 11. |    | Executive Compensation                                                                 |  | 48
|         | Item 12. |    | Security Ownership of Certain Beneficial
	Owners and Management                        |  | 48
|         | Item 13. |    | Certain Relationships and Related
	Transactions                                        |  | 48
|PART IV  |          | 48
|         | Item 14. |    | Exhibits, Financial Statement Schedules and
	Reports on Form 8-K                       |  | 48

1



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##### Table of Contents






PART I




Item 1.     Description
of Business

Interactive Data Corporation, directly and
through its subsidiaries, (the Company), is a
leading global provider of financial and business information to
institutional and retail investors. The Company primarily
supplies financial and business information to institutional and
retail investors worldwide. The Company is a leading provider of
time sensitive pricing, dividend, corporate action, and
descriptive information as well as fixed income portfolio
analytics, consulting and valuation services to institutional
fixed income portfolio managers. At the core of the business are
its extensive database expertise and technology resources.

The Company delivers real-time, end of day and
historically archived data to customers through a variety of
products featuring Internet, dedicated line, satellite and
dialup delivery protocols. Through a broad range of strategic
alliances, the Company provides links to leading financial
service and software companies for trading, analysis, portfolio
management and valuation.

On February 29, 2000, Data Broadcasting
Corporation completed a merger (the Merger) with
Interactive Data Corporation, a wholly owned subsidiary of
Pearson Longman, Inc. (Pearson Longman). Pearson
Longman, through a series of other entities, is wholly owned by
Pearson plc (Pearson). Upon the Merger, the Company
issued 56,423,949 shares of its common stock to Pearson
Longman that resulted in the ownership by Pearson Longman of
approximately 60% of the Company. Interactive Data Corporation
prior to the Merger is referred to herein as FT Interactive
Data Corporation which continues to be the Companys major
institutional services subsidiary.

The Merger has been accounted for as a reverse
acquisition. Accordingly, the historical financial statements of
FT Interactive Data Corporation are the historical financial
statements of the Company.

On June 15, 2001, after stockholder
approval, the Company changed its name from Data Broadcasting
Corporation to Interactive Data Corporation. In connection with
its name change, the Company changed its trading symbol from
DBCC to IDCO. The Companys common stock is traded on The
NASDAQ National Market and began trading under the IDCO trading
symbol on June 20, 2001.

In addition, in 2001 the Company sold several
investments and businesses for aggregate proceeds of
approximately $43.2 million and in January 2002, the
Company acquired the Securities Pricing Services of Merrill
Lynch, Pierce, Fenner & Smith Incorporated for
$48.0 million. See Managements Discussion and
Analysis of Financial Condition and Results of
Operations  Liquidity and Capital Resources.

Overview

The Company operates in two business segments:



| |                                     
| | ------------------------------------
| | (1)     Institutional
	services, and
|
| | (2)     Retail Investor
	services.  

In the Institutional services segment, the
Company supplies time sensitive pricing, dividend, corporate
action and descriptive information for more than
3.5 million securities traded around the world to banks,
brokerage firms, insurance companies, money managers and mutual
fund companies. The Company also provides fixed income portfolio
analytics, consulting and valuation services to institutional
fixed income portfolio managers.

The Retail Investor services segment provides
streaming, real-time, continuously updating financial data over
the Internet (through its eSignal® division) and via
broadcast technology to individual and professional investors
and traders. This segment provides market quotes for stocks,
options and futures, as well as charts, news, research, alerts,
analytics and decision support tools.

2



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For the last three years, total revenue
contributed by the Companys operating segments was as
follows (see Note 18 to the consolidated financial
statements for additional financial information about the
Companys segments):

|                         |           |                |         |        |  |      |         |        |  |   |         |   | 
|------------------------ | --------- | -------------- | ------- | ------ |  | ---- | ------- | ------ |  | - | ------- | - | 
|                         |           | 2001           |         | 2000   |  | 1999
|                         |           |                |         |        |  |     
|                         |           |               
|                         |           | (In thousands)
|Institutional Services   |           | $              | 294,440 |        |  | $    | 269,943 |        |  | $ | 188,956 |  
|Retail Investor Services |           |                |         |        |  |      |         |        |  |   |         |  
|                         | eSignal   |                |         | 35,392 |  |      |         | 27,427 |  |   |         |  | 
|                         | Broadcast |                |         | 10,170 |  |      |         | 16,768 |  |   |         |  | 
|                         |           |                |         |        |  |      |         |        |  |   |         |  
|Total Retail             |           | $              | 45,562  |        |  | $    | 44,195  |        |  | $ |        |  
|Total                    |           | $              | 340,002 |        |  | $    | 314,138 |        |  | $ | 188,956 |  

The Company derives a significant amount of its
revenues from outside the United States (see Note 18 to the
consolidated financial statements for information regarding such
revenues and foreign assets). The Company is subject to currency
fluctuation and risks due to political, social, regulatory, tax
and economic structures of other countries.

Institutional Services Segment

The Company operates under two brands in the
Institutional services segment of its business,
FT® Interactive Data and CMS BondEdge®.

FT®Interactive Data

FT Interactive Data is a leading provider of
financial data. It collects, maintains and models global data on
over 3.5 million securities, including a wide range of
equities, commodities, derivative instruments and fixed income
securities that are traded in numerous national and
international markets. FT Interactive Datas customers
include many of the worlds leading financial institutions.
Proprietary data delivery products provide customers with data,
which is electronically delivered in a convenient, timely and
reliable manner. FT Interactive Data plays an important
supporting role in many areas of the financial information
market, including:



| |   |                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | post-transaction portfolio evaluation, where
	customers focus on valuing and administering securities;                                                                           
|
| |  | post-transaction back office functions, in which
	purchases and sales of securities are finalized and customers
	prepare account statements for themselves and their clients; and
|
| |  | investment research, which helps customers
	determine whether and when to buy and sell securities.                                                                               

In order to meet its customers needs for
comprehensive global service, FT Interactive Data operates in
three main geographic regions: North America, United Kingdom/
Europe and Asia/ Pacific.

Services

Data

FT Interactive Data collects and calculates
information on over 2.5 million fixed income securities
traded around the world. The coverage includes North American
corporate, government and agency fixed income issues, municipal
bonds, pass-through securities and structured finance
securities. For non-North American issues, FT Interactive
Data covers convertibles, debentures, Eurobonds, government and
corporate bonds and loan capital. The data for these issues
includes pricing, call and sinking fund, called announcements,
descriptive data, interest payments, original issue discount and
reorganization data.

FT Interactive Data also collects and creates
databases of information on most equities traded on exchanges
around the world. The data includes pricing, capitalization
changes and dividends, descriptive data, earnings and shares
outstanding and reorganization announcements. FT Interactive
Data is a provider of index and constituent data to the global
investment markets, supplying a wide range of indices.

3



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FT Interactive Data stores this data in a variety
of databases to offer clients up to 34 years of history.
This data is valuable to clients who need to perform a variety
of analyses including investment and risk analyses.

Data Delivery
Services

FT Interactive Data provides data to customers
using various delivery applications that are designed to deliver
its data to clients in a timely and reliable manner. These
delivery services provide online access to a client via their PC
using a dial-up modem or a Web connection. The Company also
delivers data via a mainframe computer link that is used to
deliver large amounts of data over high-speed communication
lines.

Marketing
Strategy

FT Interactive Data markets its services through
a dedicated sales force located in the US, Europe and Asia
Pacific. The sales force is supported by a promotional campaign
focused on direct mail, trade shows and advertising in trade
publications. Programs are specialized to the US, European and
Asian markets. Most of the services are sold on a subscription
basis for a one-year initial term, with automatic renewal unless
terminated.

Under a license with The Financial Times Limited,
an affiliate of Pearson, which indirectly owns approximately 60%
of the Companys outstanding common stock, the Company uses
the FT brand in conjunction with the activities of
its institutional activities on a global basis. The Company
believes that the use of the FT brand helps FT Interactive Data
compete more effectively due to the global recognition of the
Financial Times® and FT® marks which are actively
promoted in relation to the newspaper and its Internet services.
This license has a five year term that commenced in March 2001
and renews annually thereafter until terminated, and is subject
to certain restrictions.

The Company believes that FT Interactive
Datas strength in the post-trade segment of the financial
information market is due in part to its ability to be a
full service provider of data. This entails
evaluating most, if not all, fixed income securities that are
central to FT Interactive Datas customers
businesses, not just one type of security or only those that are
widely traded.

Customers and
Competition

FT Interactive Data supplies data directly to
several thousand separate organizations including major banks,
brokerage firms and investment management firms. Most of FT
Interactive Datas customers purchase data to support their
own operational needs.

Redistributors extend FT Interactive Datas
reach to smaller institutional and individual investors. Unlike
the institutional end-user customers described above, these
redistributors use their own delivery systems, or serve as the
interface between their clients and FT Interactive Datas
delivery systems, to redistribute the data provided by FT
Interactive Data.

FT Interactive Data also operates within the
securities research segment of the financial information market,
providing securities index data to the global investment
markets. Stockbrokers, trustees, fund managers and consultants
use this data to conduct benchmarking, risk analysis, fund
tracking, performance measurement and attribution and trading
activities.

In a competitive environment, FT Interactive Data
endeavors to be one stop for customers equity
and fixed income data needs. FT Interactive Datas main
competitors include six large global suppliers of news and
financial data and many smaller suppliers that compete in a
variety of geographic and niche markets. FT Interactive Data
also faces competition from large broker dealers, which trade
fixed income securities. Coverage of securities, accuracy of
data, timeliness and reliability of data delivery and customer
support are the primary competitive factors seen in this
marketplace and the Company believes it competes favorably in
each of these areas.

4



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Technical
Infrastructure

FT Interactive Datas technological
infrastructure is designed to service the needs of its
customers. Mainframe processors located in Waltham,
Massachusetts and London are used to process securities history
and daily pricing data. Fault-tolerant processors located in
Hong Kong; London; Melbourne, Australia; New York City; and
Waltham, Massachusetts, process real-time feeds from securities
exchanges around the world. UNIX machines located in each of
these data centers are used to collect and deliver data.

Also, at each data center, FT Interactive Data
uses what it believes to be state-of-the-art disk storage
devices that are configured to provide optimum speed and
reliability.

CMS
BondEdge®

Services

BondEdge is a Windows®-based fixed income
portfolio analytic system which provides risk management,
regulatory reporting and compliance tools. BondEdge portfolio
applications include extensive quantitative risk measures,
standard and custom reports, what-if analyses, bond index
comparisons, tracking analysis, cash flow and total return
simulations, performance measurement, performance attribution
and total return optimization.

BondEdge is sold to institutional fixed income
portfolio managers on both the buy-side and the sell-side. The
open architecture of BondEdge allows for the import and export
of calculated and descriptive data. BondEdge interfaces with
major third-party accounting and asset/ liability software
packages to eliminate duplicate data entry and to improve
accuracy and efficiency within an organization.

Marketing
Strategy

In North America, the Company markets BondEdge as
CMS BondEdge, an affiliate of FT Interactive Data. In 2001,
the Company introduced BondEdge under the FT Interactive
Data brand outside North America to leverage off the strength of
the FT brand in Europe. The target market for the BondEdge
product is the institutional fixed income portfolio manager who
invests in a broad range of security types that require
specialized modeling. End-users at a client site are typically
portfolio managers, quantitative research analysts and
institutional brokers.

CMS BondEdge targets the premium end of the
market. With over 500 institutional investment firms, banks,
insurance companies, and brokerage houses in North America who
use BondEdge, CMS BondEdge believes it has a strong position in
the North American market.

BondEdge is marketed through advertising, highly
targeted trade shows specific to fixed income analysis, direct
mail and a dedicated sales force that provides on-site or remote
product demonstrations via the Internet. CMS BondEdge also hosts
its own annual fixed income conference for clients and
prospective clients. BondEdge is a subscription-based, modular
service.

Customers and
Competition

A specialist service, CMS BondEdge has five to
six main competitors of various sizes. Competition focuses on
service reputation, sophistication of analysis, type of
securities analyzed, flexibility of reporting and customer
service. The Company believes it competes favorably in each of
these areas.

Technical
Infrastructure

BondEdge clients have access to daily market data
updates via the Internet to facilitate accurate analytic
calculations and reports, with a flexible array of deployment
options.

5



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Retail Investor Services Segment

The Retail Investor services segment, operating
through the Companys eSignal division, provides streaming,
real-time financial market information and decision support
tools over the Internet and via satellite and leased lines. The
financial data and support tools include stock and commodity
market quotes, equity analytics, financial news and information,
access to historical databases, customizable portfolio tracking,
exclusive news coverage and commentary and historical and
technical charting.

Services

eSignals services are targeted to active
and professional traders and contain streaming, real-time
securities prices for more than 600,000 securities from all
major domestic markets and several international exchanges.
These services include pricing data for equities, mutual funds,
options, bonds, futures, commodities, indices and foreign
exchange rates. The datafeed also contains news headlines from
Dow Jones, Reuters U.S. Company News, Options News Exchange
and Futures World News.

Internet Based
Services

eSignal® delivers continuously updating,
real-time securities prices from its datafeed using active
push® technology on the Internet. In addition,
eSignal provides portfolio features, charting and news and news
retrieval capabilities as well as Nasdaq Level II Market
Maker information, over-the-counter bulletin board stock quotes
and access to online trading. For futures traders, eSignal
provides a streaming, real-time market data solution that covers
all known U.S. futures exchanges, including the Chicago
Mercantile Exchanges E-Minis and nearly 800 other
market indices. eSignals Market Scanners screen the market
in real time, including the entire database of stocks from the
NYSE, AMEX and Nasdaq exchanges and provides flexible
user-defined searches that allow investors to view market
activity in real-time by exchange, price range and volume.
eSignals Market Scanners provide the ability to view the
market by sector and industry, conduct pre-market searches and
identify which stocks are rallying during critical intraday
market periods.

eSignal also offers a sophisticated, real-time
financial market data solution for small-to-mid-size
institutional money managers, brokers, hedge funds, corporation
and banks via its eSignal Pro product. Delivered via an ASP
(Application Service Provider) model, eSignal Pro simplifies the
process of installing and maintaining a market data network and
eliminates the end users need to manage complicated
telecommunications networks and vendor related servers. eSignal
Pro provides real-time equity, futures, options and fixed income
pricing at competitive prices.

Trading Techniques, Inc., part of the eSignal
division, is the developer of Advanced GETTM, a
graphical charting service equipped with a full set of technical
analysis tools used by active and institutional traders.
Advanced GET maintains one of the most complete sets of standard
studies available on the market and offers a rule-based process
to trading the markets that utilizes a unique mixture of
standard, specialized and proprietary indicators to allow for an
eyes open approach to the market. Advanced GET was
one of the first services to provide objective Elliott Wave
analysis and currently offers one of the fastest and most
powerful computerized Elliott Wave models available.

eSignal continues to integrate with many direct
access trading platforms. This capability allows eSignal
subscribers to execute trades with a single click. They can then
populate a trading ticket and with direct access trading through
multiple electronic communications networks (also know as ECNs),
execute the trade.

Broadcast Based
Services

Through its eSignal division, the Company also
provides a variety of real-time services using broadcast
technology. Since broadcast based technology services are
declining, eSignal does not invest in marketing these products.

Marketing
Strategy

eSignal is marketed through advertising,
marketing alliances, third party developer relationships,
seminars, trade shows, email, direct mail and referrals.
Advertising is used to generate telephone calls to sales

6



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representatives. In addition, the Company has
developed marketing alliances with online brokers that market
eSignals Internet-delivered products to their customers.
eSignal also encourages third-party software developers to write
trading system software that is integrated with eSignals
systems. In addition, eSignal conducts product seminars, direct
mail campaigns and provides incentives to existing subscribers
for referrals.


Customers and
Competition

eSignal services active and professional
investors. These clients seek real-time, delayed or end-of-day
quotations, analytical and portfolio tracking services or some
combination thereof. The target market for the real-time
services of eSignal consists primarily of individuals who make
their own investment decisions, trade frequently and earn a
substantial portion of their income from trading.

eSignal competes mainly in the high quality,
higher price segment of its market. eSignal faces competition
primarily from six competitors that offer equivalent products
and services. The Company believes the principal competitive
factors in the industry include data availability and
reliability, ease of use, compatibility with third-party
software packages and price, and the Company believes it
competes favorably in each of these areas.

Technical
Infrastructure

Over the years, eSignal has blended technologies
to create one of the largest, most flexible networked data
transmission systems dedicated to its investor services. Built
internally by the eSignal team, the Companys data delivery
technology, TurboFeedTM, is an IP multicast
backbone that delivers real-time, streaming market data directly
from the exchanges. This technological infrastructure provides
two completely redundant ticker plant facilities with multiple,
geographically dispersed server farms, fed with live data from
direct, redundant connections with the NYSE, AMEX, Nasdaq,
Canadian, North American and European Futures and
U.S. Options exchanges. Once the data from the ticker
plants are received and consolidated, a highly compressed and
proprietary datafeed is produced and distributed via multiple
technologies to the client. News services and market commentary
are also processed in this manner.

eSignals ticker plants are manned
24 hours per day, 7 days a week. Its two locations are
in Hayward, California and Salt Lake City, Utah. Either site can
immediately function as a primary site in the event of a system
failure, equipment problem or regional disaster. User
connections are load balanced among both sites. In the event of
a complete site failure, the remaining site has the capacity to
handle the additional load.

Intellectual Property

The Company maintains a portfolio of intellectual
property, including registered and common law trademarks and
service marks, copyrights and patents, all of which are integral
to the Companys business. Collectively, the Company and
its divisions and subsidiaries claim more than
50 trademarks and service marks. The Company places
significant emphasis on its branding and considers its trademark
and service mark portfolio to be an important part of its
ongoing branding campaign. In addition, the Company owns the
copyrights to its internally developed software applications and
data delivery services. The Company currently has four United
States patents issued and one United States patent application
pending. The Company also has four foreign patents issued.

The Company operates primarily under license
agreements, both with its customers and suppliers of data. FT
Interactive Datas standard customer contracts generally
provide for a one year initial term and annual renewal
thereafter, until terminated. CMS BondEdge and eSignal clients
sign either monthly or annual contracts. While the Company does
not believe that the termination of any one customer contract
would have a material adverse effect on the Company, the
termination of a significant number of customer contracts could
result in a material adverse affect on the Companys
business. In addition, the termination of any license with a
major supplier, such as the New York Stock Exchange, could
greatly disrupt the Companys operations.

7



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Employees

The Company employed 1,516 people as of
December 31, 2001, none of whom are represented by a
collective bargaining unit. The Company believes that its
relationship with employees is good.

Backlog

Given the nature of the Companys business,
the Company has no material backlog of orders.

Regulation

The Federal Communications Commission
(FCC) regulates the broadcasting of satellite,
FM-SCA and other airwave transmissions in the United States. The
FCC has licensed the Company to transmit data from its uplink
facilities in Salt Lake City, Utah. Although the Company uses
its FCC license to transmit data to third-party satellites for
further transmission, the loss of such license would not be
expected to have a long-term material adverse effect on the
Company because of other transmission alternatives.

DBC Securities Inc., a subsidiary of the Company,
is registered as a broker-dealer with the Securities and
Exchange Commission (SEC) and various state
securities commissions and is also subject to regulation by the
National Association of Securities Dealers, Inc., of which it is
a member.

FT Interactive Data is registered with the
SEC as an investment advisor. As such it is subject to
regulation under the Investment Advisors Act of 1940.




Item 2.     Properties

The Company owns no real estate but leases the
following principal facilities for use as corporate
headquarters, sales offices and data centers:

|                     |  |           |               |        |  |             |        |                 |  |   |           |  |  |  |                | 
|-------------------- |  | --------- | ------------- | ------ |  | ----------- | ------ | --------------- |  | - | --------- |  |  |  | -------------- | 
|                     |  | Operating |               | Square |  | Current     |        |                
|Location             |  | Unit      |               | Feet   |  | Annual Rate |        | Expiration Date
|                     |  |           |               |        |  |             |        |                
|New York, NY         |  |           | Institutional |        |  |             | 87,304 |                 |  | $ | 1,922,908 |  |  |  | May 2013       | 
|New York, NY         |  |           | Institutional |        |  |             | 27,386 |                 |  | $ | 857,181   |  |  |  | November 2009  | 
|Bedford, MA          |  |           | Corporate     |        |  |             | 80,349 |                 |  | $ | 1,522,082 |  |  |  | July 2006      | 
|Boston, MA           |  |           | Institutional |        |  |             | 11,910 |                 |  | $ | 464,490   |  |  |  | February 2005  | 
|Waltham, MA          |  |           | Institutional |        |  |             | 32,535 |                 |  | $ | 512,348   |  |  |  | September 2005 | 
|Chicago, IL          |  |           | Institutional |        |  |             | 3,689  |                 |  | $ | 55,335    |  |  |  | September 2004 | 
|Los Angeles, CA      |  |           | Institutional |        |  |             | 600    |                 |  | $ | 34,200    |  |  |  | October 2002   | 
|Los Angeles, CA      |  |           | Institutional |        |  |             | 25,703 |                 |  | $ | 703,200   |  |  |  | October 2002   | 
|Hong Kong, PRC       |  |           | Institutional |        |  |             | 741    |                 |  | $ | 20,262    |  |  |  | April 2003     | 
|Melbourne, Australia |  |           | Institutional |        |  |             | 4,828  |                 |  | $ | 45,901    |  |  |  | November 2005  | 
|Singapore            |  |           | Institutional |        |  |             | 743    |                 |  | $ | 21,399    |  |  |  | December 2002  | 
|Hayward, CA(1)       |  |           | Retail        |        |  |             | 60,000 |                 |  | $ | 942,972   |  |  |  | June 2013      | 
|Salt Lake City, UT   |  |           | Retail        |        |  |             | 17,196 |                 |  | $ | 302,772   |  |  |  | December 2003  | 
|London, England      |  |           | Retail        |        |  |             | 5,940  |                 |  | $ | 88,000    |  |  |  | November 2008  | 
|Akron, OH            |  |           | Retail        |        |  |             | 6,500  |                 |  | $ | 154,992   |  |  |  | September 2003 | 
|London, England      |  |           | Institutional |        |  |             | 65,000 |                 |  | $ | 1,330,775 |  |  |  | April 2010     | 

8



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##### Table of Contents



|                    |  |           |               |        |  |             |       |                 |  |   |         |  |  |  |             | 
|------------------- |  | --------- | ------------- | ------ |  | ----------- | ----- | --------------- |  | - | ------- |  |  |  | ----------- | 
|                    |  | Operating |               | Square |  | Current     |       |                
|Location            |  | Unit      |               | Feet   |  | Annual Rate |       | Expiration Date
|                    |  |           |               |        |  |             |       |                
|Edinburgh, Scotland |  |           | Institutional |        |  |             | 5,200 |                 |  | $ | 100,707 |  |  |  | August 2006 | 
|Avon, CT            |  |           | Institutional |        |  |             | 2,546 |                 |  | $ | 43,282  |  |  |  | June 2002   | 
|Dublin, Ireland     |  |           | Institutional |        |  |             | 4,000 |                 |  | $ | 83,443  |  |  |  | March 2005  | 
|Luxembourg          |  |           | Institutional |        |  |             | 2,500 |                 |  | $ | 95,040  |  |  |  | May 2002    | 



---



|    |                                                                          
|--- | -------------------------------------------------------------------------
|(1) | Certain of this space has been sublet under
	agreements of various terms.

The Company believes its facilities are adequate
for its current operations.




Item 3.     Legal
Proceedings

Derivative
Action Early in 2001,
seven lawsuits were filed by various stockholders of the Company
against the Companys directors, Pearson Longman and
Pearson. These actions have been consolidated in the Delaware
Chancery Court for New Castle County under the caption In re
Data Broadcasting Corporation Derivative Litigation:
Consolidated Civil Action No. 18665-NC(the
Derivative Action). As is usual in derivative
actions, the Company is named as a nominal defendant in the
Derivative Action on the theory that the plaintiff stockholders
are allegedly suing on its behalf and for its benefit.

The Derivative Action challenges the
Companys January 2001 sale of its 34.4% interest in
MarketWatch.com, Inc. (MarketWatch) to Pearson, the
parent company of the Companys majority stockholder, as
having been consummated at an allegedly inadequate price due to
the supposedly undue influence of Pearson as the Companys
majority stockholder. Plaintiffs seek to have Pearson and the
Companys directors account to the Company for
damages that the Company allegedly sustained by reason of an
unduly low sale price.

The Company and its directors have answered the
consolidated complaint, and discovery has just commenced. The
Company expects to contest the allegations against it and its
directors vigorously.

Heartland
Litigation On
January 14, 2002, two stockholders (the Nagels)
of two municipal bond mutual funds (the Heartland High
Yield Funds) sponsored by The Heartland Group, Inc. filed
suit against those funds, their corporate sponsors, their
advisors and their independent auditors. The complaint, which is
pending in Federal court in the Eastern District of Wisconsin
under the caption Robert L. Nagel, et al. v. The Heartland
Group, Inc., et al. (E.D. Wis. Civil Action
No. 01-C-1004), closely tracks a consolidated class
action complaint that reflects the fraud, misrepresentation and
negligence claims of 21 individual stockholders against the
same defendants. Unlike the consolidated class action complaint,
however, the Nagels have also named the Company as an additional
defendant in their separate action. The claim against the
Company is that it allegedly was negligent, in an unspecified
way, in its provision of securities prices to the Heartland High
Yield Funds and that its negligence allegedly contributed to a
sharp drop, in October 2000, in the net asset values of those
funds. The Company intends to contest the viability of being
named as an additional defendant without any particularization
of its alleged misconduct. If the Company is deemed to have been
properly named a defendant in the separate Nagel action, it
expects to contest the allegations against it vigorously.

In addition to the matters discussed above, the
Company is involved in ordinary, routine litigation from time to
time in the ordinary course of business with a portion of the
defense and/or settlement costs being covered by various
commercial liability insurance policies.






|        |                                                     
|------- | ----------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
	Holders

No matters were submitted to a vote of security
holders during the fourth quarter of 2001.

9



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##### Table of Contents






PART II






|        |                                                                                  
|------- | ---------------------------------------------------------------------------------
|Item 5. | Market and Prices for Registrants
	Common Equity and Related Stockholder Matters

Principal Market and Prices

The Company has two classes of authorized stock:
200 million shares of common stock, $0.01 par value, of
which 90,245,419 were outstanding as of December 31, 2001,
and 5 million shares of preferred stock $0.01 par value,
none of which has been issued.

At the Annual Meeting of the Company held on
June 15, 2001, holders of a majority of the Companys
common stock approved a proposal to amend the Certificate of
Incorporation to change the Companys name from Data
Broadcasting Corporation to Interactive Data Corporation. The
Corporations common stock is traded on The Nasdaq National
Market and effective as of June 20, 2001, it trades under
the trading symbol IDCO.

As of March 11, 2002, there were 1,569
holders of record of the Companys common stock, and the
Company believes it had approximately 20,000 beneficial owners
of its common stock.

In January 2001, the Company paid a special
dividend of $0.29 per share, or an aggregate amount of
$26,871,000, related to the proceeds received from the sale of
the Companys investment in MarketWatch. The Company
currently intends to retain future earnings, if any, for the
development of the Companys business and does not
anticipate paying cash dividends on the Companys common
stock in the foreseeable future. Future determinations by the
Companys board of directors to pay dividends on the
Companys common stock would be based primarily upon the
financial condition, results of operations and business
requirements of the Company. Dividends, if any, would be payable
in the sole discretion of the Companys board of directors
out of the funds legally available therefore.

The range of closing prices for the common stock
of the Company as reported by Nasdaq for each quarterly period
since the first quarter of 2000 is shown below.

|      |                            |      |   |       |  |  |   |       | 
|----- | -------------------------- | ---- | - | ----- |  |  | - | ----- | 
|      |                            | High |   | Low  
|      |                            |      |   |      
|2001: |                            |      |   |       |  |  |   |      
|      | Quarter Ended March 31     |      | $ | 7.59  |  |  | $ | 3.69  | 
|      | Quarter Ended June 30      |      | $ | 10.25 |  |  | $ | 6.50  | 
|      | Quarter Ended September 30 |      | $ | 13.10 |  |  | $ | 9.65  | 
|      | Quarter Ended December 31  |      | $ | 15.00 |  |  | $ | 12.67 | 

|      |                            |      |   |       |  |  |   |      | 
|----- | -------------------------- | ---- | - | ----- |  |  | - | ---- | 
|      |                            | High |   | Low  
|      |                            |      |   |      
|2000: |                            |      |   |       |  |  |   |     
|      | Quarter Ended March 31     |      | $ | 11.38 |  |  | $ | 7.44 | 
|      | Quarter Ended June 30      |      | $ | 7.13  |  |  | $ | 4.03 | 
|      | Quarter Ended September 30 |      | $ | 5.81  |  |  | $ | 3.00 | 
|      | Quarter Ended December 31  |      | $ | 4.41  |  |  | $ | 2.44 | 

The average of high and low bid quotations on
March 11, 2002 was $17.05 and $16.65.

10



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##### Table of Contents






Item 6.     Selected
Financial Data

The following selected historical consolidated
financial information for each of the years ended
December 31, 1997 through 2001 has been derived from the
Companys consolidated financial statements and represents
the historical consolidated financial information of
FT Interactive Data prior to the Merger and the combined
Company subsequent to the Merger. For additional information see
Managements Discussion and Analysis of Financial
Condition and Results of Operations relating to the
Company, included elsewhere herein. The information set forth
below is qualified by reference to and should be read in
conjunction with the Companys consolidated financial
statements and related notes included herein.

|                                         |         |                                           |         |         |  |      |          |        |   |      |         |        |  |   |         |        |   |   |         |        |  
|---------------------------------------- | ------- | ----------------------------------------- | ------- | ------- |  | ---- | -------- | ------ | - | ---- | ------- | ------ |  | - | ------- | ------ | - | - | ------- | ------ | -
|                                         |         |                                          
|                                         |         | As of and For the Year ended December 31,
|                                         |         |                                          
|                                         |         | 2001                                      |         | 2000(1) |  | 1999 |          | 1998   |   | 1997
|                                         |         |                                           |         |         |  |      |          |        |   |     
|                                         |         |                                          
|                                         |         | (In thousands, except per share amounts) 
|Revenues                                 |         | $                                         | 340,002 |         |  | $    | 314,138  |        |   | $    | 188,956 |        |  | $ | 153,677 |        |   | $ | 140,534 |       
|Income (loss) from operations            |         |                                           | 25,653  |         |  |      | (3,091   | )      |   |      | 17,604  |        |  |   | (30     | )      |   |   | (5,373  | )     
|Net income (loss)                        |         |                                           | 4,312   |         |  |      | (143,472 | )      |   |      | 6,197   |        |  |   | (3,215  | )      |   |   | (6,944  | )     
|Net income (loss) per share              |         |                                           |         |         |  |      |          |        |   |      |         |        |  |   |         |        |   |   |         |       
|                                         | Basic   |                                           |         | .05     |  |      |          | (1.68  | ) |      |         | .11    |  |   |         | (.06   | ) |   |         | (.12   | )
|                                         | Diluted |                                           |         | .05     |  |      |          | (1.68  | ) |      |         | .11    |  |   |         | (.06   | ) |   |         | (.12   | )
|Weighted average shares                  |         |                                           |         |         |  |      |          |        |   |      |         |        |  |   |         |        |   |   |         |       
|                                         | Basic   |                                           |         | 90,844  |  |      |          | 85,560 |   |      |         | 56,424 |  |   |         | 56,424 |   |   |         | 56,424 |  
|                                         | Diluted |                                           |         | 92,510  |  |      |          | 85,560 |   |      |         | 56,424 |  |   |         | 56,424 |   |   |         | 56,424 |  
|Total assets                             |         |                                           | 697,983 |         |  |      | 742,090  |        |   |      | 452,702 |        |  |   | 295,048 |        |   |   | 288,687 |       
|Stockholders equity                     |         |                                           | 582,667 |         |  |      | 622,512  |        |   |      | 340,953 |        |  |   | 221,736 |        |   |   | 214,695 |       
|Cash dividends declared per common share |         |                                           | .29     |         |  |      |         |        |   |      |        |        |  |   |        |        |   |   |        |       



---



|    |                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|(1) | Results for 2000 include equity in the losses
	from MarketWatch of $67,229 and an other than temporary loss in
	MarketWatch of $141,844.

11



---



##### Table of Contents








|        |                                                                                                       
|------- | ------------------------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
	of Financial Condition and Results of Operations (in
	thousands)

The following discussion should be read in
conjunction with Item 6. Selected Financial
Data and the Companys consolidated financial
statements included herein.

General

The Company primarily supplies financial and
business information to institutional and retail investors
worldwide. The Company is a leading provider of time sensitive
pricing, dividend, corporate action and descriptive information
for more than 3.5 million securities. The Company also
provides fixed income portfolio analytics, consulting and
valuation services to institutional fixed income portfolio
managers. At the core of the business are its extensive database
expertise and technology resources.

The Company delivers real-time, end of day and
historically archived data to customers through a variety of
products featuring Internet, dedicated line, satellite and
dialup delivery protocols. Through a broad range of strategic
alliances, the Company provides links to leading financial
service and software companies for trading, analysis, portfolio
management and valuation.

The Company operates in two business segments:

Institutional
services delivery of time
sensitive pricing, dividend, corporate action, hard-to-value
unlisted fixed income instruments, and descriptive information
and fixed income portfolio analytics to institutional customers.

Retail Investor
services delivery of
real-time financial market information and decision support
tools to retail customers.

The services provided by the Company include the
following:

Institutional
services:

FT Interactive Data provides a wide range of
high quality financial information to trading houses, custodians
and fund managers worldwide. The financial information collected
and distributed includes pricing, descriptive and corporate
action information on securities from all over the world.

CMS BondEdge provides fixed income
analytical tools and models designed for investment managers,
broker dealers, insurance companies and bank and pension fund
managers.

Retail
investor services:

The Internet based services offer real-time,
Internet delivered subscription quote service for serious
traders offering charts, news, research, decision support tools
and alerts direct to a laptop, PC or telephone.

The Companys broadcast services deliver
real-time quotes to communication devices that rely on FM
subcarriers, satellite and cable television or telephone lines.

Market
trends:

In the core institutional services market,
revenues from the FT Interactive Data business have
remained relatively resilient in the current uncertain market
conditions. The Company believes that this is because much of
the data supplied by the Company is mission critical to its
customers. The major cause for loss of revenue in this segment
is when financial institutions merge and look to gain synergies
by combining their operations, removing the need for two data
sources. There is a trend in North America for major financial
institutions to outsource their back office accounting
operations for the valuation of their security holdings and
portfolios to service bureaus and custodian banks. The Company
has established a relationship with these service bureaus and
custodian banks, is a major data supplier to these institutions
and expects to benefit from their growth.

12



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##### Table of Contents



The Companys CMS BondEdge division saw
a slowdown in sales primarily attributable to cost cutting
across financial institutions, and some business fall-out from
the events of September 11th. Growth in the institutional
market will come from the Companys ability to expand its
data content offerings to meet the needs of its clients, as they
prepare for the introduction of Straight Through Processing and
settling trades within one day, planned by the industry to occur
by mid-2005. In addition, the Company will look to expand its
market share in the burgeoning single European market. On
January 31, 2002, the Company completed its acquisition of
the Securities Pricing Service business of Merrill Lynch,
Pierce, Fenner & Smith Incorporated for an aggregate
consideration of $48,000, which will allow the
FT Interactive Data business to expand its client base and
enhance its pricing and coverage of fixed income securities.

In the Companys retail investor services
segment, the eSignal product continued to strengthen its
position as a leading financial data provider for retail and
professional investors. After a decline in subscribers through
the end of September 2001, the Company experienced net growth in
each of the final three months of 2001, and this growth has
continued in 2002. The Company expects the introduction of
European real-time streaming financial market data to help
enhance the prospects for eSignal in this region.

Results of Operations

Selected Financial Data

|                                                   |           |                                       |         |        |  |      |          |        |   |   |         |        | 
|-------------------------------------------------- | --------- | ------------------------------------- | ------- | ------ |  | ---- | -------- | ------ | - | - | ------- | ------ | 
|                                                   |           |                                      
|                                                   |           | For the Years Ended December 31,     
|                                                   |           | 2001                                  |         | 2000   |  | 1999
|                                                   |           |                                       |         |        |  |     
|                                                   |           |                                      
|                                                   |           | (Amounts in thousands, except for per
|                                                   |           | share information)                   
|Revenues                                           |           |                                       |         |        |  |      |          |        |   |   |         |       
|Institutional                                      |           | $                                     | 294,440 |        |  | $    | 269,943  |        |   | $ | 188,956 |       
|Retail:                                            |           |                                       |         |        |  |      |          |        |   |   |         |       
|                                                   | eSignal   |                                       |         | 35,392 |  |      |          | 27,427 |   |   |         |       | 
|                                                   | Broadcast |                                       |         | 10,170 |  |      |          | 16,768 |   |   |         |       | 
|                                                   |           |                                       |         |        |  |      |          |        |   |   |         |       
|TOTAL REVENUES                                     |           |                                       | 340,002 |        |  |      | 314,138  |        |   |   | 188,956 |       
|Cost of Services                                   |           |                                       | 103,618 |        |  |      | 105,524  |        |   |   | 55,031  |       
|Selling, General & Administrative                  |           |                                       | 122,066 |        |  |      | 116,091  |        |   |   | 77,743  |       
|                                                   |           |                                       |         |        |  |      |          |        |   |   |         |       
|EBITDA(1)                                          |           |                                       | 114,318 |        |  |      | 92,523   |        |   |   | 56,182  |       
|Depreciation                                       |           |                                       | 13,139  |        |  |      | 12,671   |        |   |   | 6,681   |       
|Amortization                                       |           |                                       | 75,526  |        |  |      | 82,943   |        |   |   | 31,897  |       
|                                                   |           |                                       |         |        |  |      |          |        |   |   |         |       
|INCOME (LOSS) FROM OPERATIONS                      |           |                                       | 25,653  |        |  |      | (3,091   | )      |   |   | 17,604  |       
|Equity in loss from MarketWatch.com, Inc.          |           |                                       |        |        |  |      | (67,229  | )      |   |   |        |       
|Other than temporary loss in MarketWatch.com, Inc. |           |                                       |        |        |  |      | (141,844 | )      |   |   |        |       
|Other income, net                                  |           |                                       | 2,882   |        |  |      | 1,170    |        |   |   | 241     |       
|                                                   |           |                                       |         |        |  |      |          |        |   |   |         |       
|INCOME (LOSS) BEFORE INCOME TAXES                  |           |                                       | 28,535  |        |  |      | (210,994 | )      |   |   | 17,845  |       
|Income tax expense (benefit)                       |           |                                       | 24,223  |        |  |      | (67,522  | )      |   |   | 11,648  |       
|                                                   |           |                                       |         |        |  |      |          |        |   |   |         |       
|NET INCOME (LOSS)                                  |           | $                                     | 4,312   |        |  | $    | (143,472 | )      |   | $ | 6,197   |       
|                                                   |           |                                       |         |        |  |      |          |        |   |   |         |       
|NET INCOME (LOSS) PER SHARE                        |           |                                       |         |        |  |      |          |        |   |   |         |       
|                                                   | Basic     |                                       |         | $0.05  |  |      | $        | (1.68  | ) |   | $       | 0.11   | 
|                                                   | Diluted   |                                       |         | $0.05  |  |      | $        | (1.68  | ) |   | $       | 0.11   | 
|Weighted average shares outstanding:               |           |                                       |         |        |  |      |          |        |   |   |         |       
|                                                   | Basic     |                                       |         | 90,844 |  |      |          | 85,560 |   |   |         | 56,424 | 
|                                                   | Diluted   |                                       |         | 92,510 |  |      |          | 85,560 |   |   |         | 56,424 | 



---



|    |                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | EBITDA is defined as net income
	before other income, net, income taxes, depreciation and
	amortization expense, equity from losses of MarketWatch.com,
	Inc. (MarketWatch) and other than

13



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##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | temporary loss in MarketWatch. EBITDA is
	presented because it is a widely accepted indicator of funds
	available to business, although it is not a measure of liquidity
	or financial performance under generally accepted accounting
	principles. The Company believes that EBITDA, while providing
	useful information, should not be considered in isolation or as
	an alternative to net income or cash flows as determined under
	generally accepted accounting principles. EBITDA, as presented
	here, may differ from similarly titled measures reported by
	other companies due to potential differences in methods of
	calculation between the Company and other companies.

2001 versus
2000

The Companys results for 2001 include a
full year of results for both the FT Interactive Data
business and the Data Broadcasting Corporation (DBC)
business, while the results for 2000 include the operating
results of the FT Interactive Data business from January 1,
2000 and the operating results of the DBC business from
February 29, 2000. The Companys results for 2000 also
include results from the Federal News Service (FNS)
business, which was sold on January 10, 2001 and its equity
in the losses of MarketWatch and the other than temporary loss
on the MarketWatch investment.

Revenue for the institutional services business
increased by 9% in 2001 over 2000. The increase reflects strong
growth in the FT Interactive Data business and the
inclusion of the CMS BondEdge business for a full year in
2001, being partially offset by the sale of the FNS business in
January 2001. The Company experienced significant growth, in
part due to the continuing expansion of the mutual fund industry
in North America, with the number of funds continuing to grow.
In addition, the Company continues to increase market share for
its fixed income evaluated pricing service, and experienced
strong growth from data provided to service bureaus and
custodian banks. The growth was adversely affected by foreign
exchange due to the strength of the US dollar over the
UK pound. Excluding the effects of foreign exchange,
revenue for the institutional services business grew by 11%.
Revenue for the retail investor services eSignal business grew
by 29%, primarily reflecting the inclusion of this business for
a full year in 2001. The Companys broadcast business
declined by 39%, due to customers migrating to the
Companys Internet product, despite the inclusion of an
additional two months of operating results in 2001.

Cost of services decreased by 2% in 2001 over
2000. The decrease was mainly due a combination of the sale of
the FNS business and cost cutting measures taken in the
Companys retail investor services segment to reflect the
lower subscriber levels in the Broadcast and eSignal businesses,
being partially offset by an additional two months costs
following the Merger. Cost of services as a percentage of
revenue declined from 34% in 2000 to 30% in 2001. The main
reasons for this decline were the cost reductions made in the
Companys retail investor services business referred to
above and the sale of the FNS business. Selling, general and
administrative expenses as a percentage of revenue decreased
from 37% in 2000 to 36% in 2001. The main reason for this
decrease was the decline in marketing and sales expenditures in
the Companys retail investor services business, combined
with synergies from merging the central functions of DBC with
those of FT Interactive Data.

EBITDA increased from $92,523 in 2000 to $114,318
in 2001, an increase of 24%. This increase was due to the
revenue growth in the Institutional Services business and
improved margins in both the Companys business segments
combined with the contribution from an additional two months of
operating results from the DBC businesses. In addition, the
Company continued to benefit from the synergies realized from
combining the businesses of Muller Data® Corporation,
MuniView® and Valorinform (the Acquired
Businesses) (see Note 5 to the consolidated financial
statements) with FT Interactive Data and as a result of the
Merger (see Note 3 of the consolidated financial
statements).

Income from operations increased from a loss of
$3,091 in 2000 to income of $25,653 in 2001. The increase in
income from operations was due to the factors discussed above
and lower amortization charges.

Income before taxes increased from a loss of
$210,994 in 2000 to income of $28,535 in 2001. The main reasons
for the increase were that in 2000 the Company had an equity
loss from its investment in MarketWatch of $67,229. In addition,
on December 27, 2000, the Company announced the sale of its
34.4% ownership in MarketWatch to Pearson for $26,888 which
resulted in the recognition of an other than

14



---



##### Table of Contents



temporary loss of $141,844 on the MarketWatch
investment. Other income increased from $1,170 in 2000 to $2,882
in 2001. This increase was due primarily to higher invested cash
balances in 2001 than in 2000.


The Companys effective tax rate changed
from a benefit of 32% in 2000 to an expense of 85% in 2001
mainly due to net income in 2001 compared with losses in 2000.
The difference between the Companys statutory tax rate and
effective tax rate was primarily due to amortization expense
deducted for financial reporting purposes, which is not
deductible for federal and state tax purposes.

The Company generated net income of $4,312 in
2001 compared with a net loss of $143,472 in 2000. This
improvement was primarily due to higher revenue and income from
operations in 2001 versus 2000 and the significant loss
associated with the investment and disposition of MarketWatch in
2000.

Weighted average diluted shares outstanding grew
by 8% due to the inclusion, throughout 2001, of the shares
issued in connection with the Merger.

2000 versus
1999

The Companys results for the year ended
December 31, 2000 include a full years results for
FT Interactive Data and the operating results from the DBC
business from February 29, 2000. The historical results for
the year ended December 31, 1999 include only the
FT Interactive Data business. This is due to the Merger.

Revenue for the institutional services business
increased by 43% in 2000 over 1999. The increase was primarily
due to the inclusion of the results in 2000 of the Acquired
Businesses, which were acquired in the latter half of 1999, the
inclusion of DBC, and growth from the core FT Interactive
Data business. There are no comparatives for the retail investor
services business since FT Interactive Data did not operate
in this segment prior to the Merger.

Cost of services increased by 92% in 2000 over
1999. This increase was due to the inclusion of a full year of
operating results from the Acquired Businesses in 2000, and the
inclusion of ten months operating results of DBC. Costs of
services as a percentage of revenue increased from 29% in 1999
to 34% in 2000. The main reason for this growth was the higher
percentage of overall costs associated with cost of services for
DBC compared with FT Interactive Data. Selling, general and
administrative expenses increased by 49% in 2000 over the
comparable period in 1999. This increase was due to the
inclusion of the Acquired Businesses and ten months of the
operations of DBC. Selling, general and administrative expenses
as a percentage of revenue decreased from 41% in 1999 to 37% in
2000. The main reason for this decrease was the lower percentage
of these costs associated with the DBC businesses combined with
synergies realized from combining the Acquired Businesses with
FT Interactive Data and merging the central functions of
DBC with those of FT Interactive Data.

EBITDA increased from $56,182 in 1999 to $92,523
in 2000, an increase of 65%. This increase was partially due to
the inclusion of the Acquired Businesses and the inclusion of
ten months of DBCs results. In addition, the increase in
EBITDA that is larger than revenue resulted from the synergies
realized from combining the Acquired Businesses with
FT Interactive Data and merging the central functions of
DBC with those of FT Interactive Data, as outlined above.

Income from operations declined from $17,604 in
1999 to a loss of $3,091 in 2000. The decline in income from
operations was due to the inclusion of the amortization of the
goodwill and intangibles relating to the Acquired Businesses,
and goodwill and intangible amortization arising from the Merger.

The Companys pre-tax share of the net
losses from MarketWatch, in 2000, totaled $67,229. There was no
investment in MarketWatch in 1999. On December 27, 2000,
the Company announced the sale of its 34.4% ownership in
MarketWatch to Pearson for $26,888. The Company recorded an
other than temporary loss of $141,844 on the MarketWatch
investment representing the difference between the book value of
the investment and the sale price. The sale was consummated in
early January 2001 and net proceeds of $26,871 were distributed
to stockholders.

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Other income increased from $241 in 1999 to
$1,170 in 2000. This increase was due mainly to higher invested
cash balances in 2000 than in 1999.

The Companys effective tax rate declined
from a charge of 65% to a benefit of 32% mainly due to the
losses in 2000 compared with net income in 1999. The difference
between the Companys statutory tax rate and effective tax
rate is primarily due to amortization deducted for financial
reporting purposes which is not deductible for federal and state
tax purposes.

The Company generated a net loss of $143,472 in
2000 compared with net income of $6,197 in 1999. This was due to
higher amortization expense, the Companys share of
MarketWatchs losses, the loss on the write down of the
MarketWatch investment and the write off of a discontinued
trademark, partially offset by a benefit from income taxes.

Weighted average shares outstanding grew by 52%
due to the shares issued to Pearson on February 29, 2000 in
the Merger.

Liquidity and Capital Resources

Cash provided by operating activities was
$93,812, $64,950, and $39,310 in 2001, 2000, and 1999
respectively. The increase from 2000 to 2001 was due to the
improved operating results of the Company and improved
management of working capital. The increase from 1999 to 2000
resulted from the acquisition of the Acquired Businesses in the
second half of 1999 and the Merger.

The Companys capital expenditures increased
from 1999 to 2000 but declined in 2001. In 2000, they increased
from $7,920 in 1999 to $15,699, as a result of the Merger and
continuing integration of all the businesses. In 2001, they
declined to $12,609 reflecting the slow down in the retail
investor services segment and completion of the integration of
the Acquired Businesses. Capital expenditures are expected to
grow in 2002 due to the integration of the business acquired
from Merrill Lynch Pierce, Fenner & Smith Incorporated in
January 2002. In addition, the Company plans to invest in
capital assets that will allow it to migrate its multiple legacy
platforms to a common technology base.

In 1999, FT Interactive Data used $149,078 for
the purchase of the Acquired Businesses. In 2000, the Company
spent $14,766 on two acquisitions. On April 1, 2000,
FT Interactive Data acquired Itex (FIT) Limited for
consideration totaling $12,800, comprised of a cash payment of
$11,200 plus relief against an accounts receivable due to the
Companys UK subsidiary of $1,600. On August 31, 2000,
the Company acquired Trading Techniques, Inc. for consideration
totaling $5,566, comprised of cash of $3,566 and a deferred
payment of $2,000. In 2000, the Company also completed the
Merger.

In 2001, the Company received $43,224 from the
sale of investments and businesses. This consisted of the net
proceeds of $26,871 from the sale of its investment in
MarketWatch, which the Company distributed to its stockholders
by way of a dividend. The Company also received net proceeds of
$3,853 from the sale of its FNS business and $12,500 from the
disposition of its investment in Sportsline.com, Inc. The
Company utilized $24,273 to repurchase 2,000 shares of treasury
stock. Also, in 2001, the Company received $6,084 from the
exercise of 1,043 stock options compared with $402 in 2000 from
the exercise of 192 stock options.

On January 2, 2002, the Company announced
that it would acquire the Securities Pricing Service of Merrill
Lynch, Pierce, Fenner & Smith, Incorporated. The
consideration was $48,000 in cash. The acquisition closed on
January 31, 2002. The consideration was paid from the
existing cash resources of the Company. In 2001, the Company
entered into an unsecured credit facility for $10,000, with
KeyBank National Association. During 2001, there were no
borrowings associated with this credit facility and at
December 31, 2001, there was no outstanding balance. The
credit facility consists of a $10,000 line of credit that
matures on May 1, 2002. Borrowings under this agreement
bear interest at Prime or LIBOR plus 2%, at the Companys
discretion. The Company entered into this short-term line of
credit to facilitate financial flexibility with respect to
potential acquisitions. To date, all acquisitions have been
funded out of the Companys operating funds. The Company
does not expect to utilize this credit facility prior to its
expiration date; however, it does expect to renew the facility.

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Management believes that the cash generated by
operating activities, together with its existing cash and
financing arrangement will be sufficient to meet the short-and
long-term needs of the Company.

Income Taxes

The Company recognizes future tax benefits or
expenses attributable to its temporary differences, net
operating loss carry forwards and tax credit carry forwards.
Recognition of deferred tax assets is subject to the
Companys determination that realization is more likely
than not. Based on taxable income projections, management
believes that the majority of the recorded deferred tax assets
will be realized.

Related Parties Transactions

The Company and Pearson are parties to a
management services agreement that renews annually. This
agreement governs the provision of services described below
effective as of February 29, 2000.

Pursuant to the agreement, Pearson provides
certain services to the Company and the Company provides certain
services to Pearson. The services provided by Pearson to the
Company afford the Company administrative convenience and the
Company believes they are more favorable to it than if it had
negotiated similar arrangements with non-affiliated third
parties. The services include administering the 401(k) and
employee health benefit plans, insurance, billing, accounts
payable, accounts receivable, computer and accounting system
support, financial accounting, tax and payroll services related
to certain subsidiaries of the Company, primarily in England.
The services provided by the Company to Pearson include
editorial, information technology and property services. A
majority of the charges to and from Pearson and its affiliates
are at cost. Certain of the Companys directors are
employees of Pearson. The independent committee of the
Companys board of directors, which consists of three
directors, none of whom are employees of Pearson, approved this
agreement on behalf of the Company. There was no material effect
on the financial condition or results of operations of the
Company associated with the signing of this agreement. If
Pearsons services to the Company were to be terminated the
Company would be required to seek equivalent services in the
open market, at potentially increased costs. In addition, the
Company would lose the efficiencies of working in concert with
Pearson, and would bear the entire burden of administrating such
services, resulting in an increased demand on the Companys
administrative resources.

In 2001, Pearsons Financial Times Group
entered into a trademark license agreement with the Company
authorizing the Company to use the FT and
Financial Times trademarks and logos in its
business. The license grants the Company the right to use the FT
and Financial Times brands for a five-year period for one
British Pound with an automatic renewal thereafter, unless
terminated. The license is subject to quality control standards,
restrictions on sublicensing the trademarks to third parties and
certain other restrictions. The independent committee of the
Companys board of directors approved this agreement on
behalf of the Company.

On March 26, 2001, the Company purchased used
equipment in the form of servers for an aggregate of $97 from
FT.com, a wholly owned subsidiary of Pearson. The purchase price
was at or better than discounts offered elsewhere for comparable
equipment and the purchase was approved by the independent
committee of our board of directors on behalf of the Company.

Any amounts payable or receivable to and from
Pearson are classified as an affiliate transaction on the
balance sheet. For the years ended December 31, 2001, 2000
and 1999, the Company incurred net (income)/expense of $1,749,
($3,508), and $588 for these services provided to Pearson and
received from Pearson. In 2000, the Company had an arrangement
with a Pearson affiliate, Financial Times Electronic Publishing
(FTEP), for FTEPs use of certain production
equipment. In 2000, the Company invoiced FTEP $4,465 for this
service. The Company recorded this transaction as a reduction to
costs. This service was not in effect for the years ended
December 31, 1999 and 2001.

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Critical Accounting Policies

The Companys discussion and analysis of its
financial condition and results of operations are based upon the
Companys consolidated financial statements, which have
been prepared in accordance with accounting principles generally
accepted in the United States. For a detailed discussion on the
application of these and other accounting policies, see
Note 1 in the Notes to the Consolidated Financial
Statements in Item 8 of this Annual Report on
Form 10-K.

The preparation of these financial statements
requires the Company to make estimates and judgments that affect
the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, the Company evaluates its
estimates, including those related to revenue and bad debts,
goodwill and intangible assets, income taxes and contingencies
and commitments. The Company bases its estimates on historical
experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under
different assumptions or conditions.

The Company believes the following critical
accounting policies affect its more significant judgments and
estimates used in the preparation of its consolidated financial
statements:



Revenue
Recognition

Revenues are recognized over contractual periods
as services are performed. Amounts recognized as revenue are
determined based upon contractually agreed upon fee schedules
with the Companys customers. The Company accounts for
subscription revenues received in advance of service being
performed by deferring such amounts until the related services
are performed. From time to time, the Company is required to
adjust revenue associated with incorrect billings and data
accessed inadvertently by customers. The Company maintains a
reserve for these adjustments based upon historical experience
and believes that the reserve established as of
December 31, 2001 is adequate.



Goodwill

Goodwill is recorded in connection with business
acquisitions and is amortized on a straight-line basis over an
estimated benefit period of ten and twenty years. Goodwill
represents the excess purchase price over the fair value of
identifiable net assets at the acquisition date. As a result of
Financial Accounting Standard No. 142, Goodwill and
other Intangible Assets, the Company will cease recording
amortization expense associated with its acquired goodwill.

The Company reviews goodwill for impairment
whenever changes in business circumstances indicate that the
carrying value of the assets may not be fully recoverable or
that the useful lives of these assets are no longer appropriate.
Each impairment test is based on a comparison of the
undiscounted cash flows to the recorded value of the asset. If
an impairment is indicated, the asset is written down to its
estimated fair value on a discounted cash flow basis.



Income
Taxes

Income tax assets and liabilities are determined
by taxable jurisdiction. The Company does not provide for taxes
on undistributed earnings of its foreign subsidiaries. It is the
Companys intention to reinvest undistributed earnings of
the Companys foreign subsidiaries and thereby indefinitely
postpone their remittance. Accordingly, no provision has been
made for foreign withholding taxes or United States income taxes
which may become payable if undistributed earnings of foreign
subsidiaries are paid as dividends to the Company.

Throughout the year the Company determines its
periodic income tax expense based upon the current period income
and the estimated annual effective tax rate for the Company. The
rate is revised, if necessary, as

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of the end of each successive interim period
during the fiscal year to the Companys best current
estimate of its annual effective tax rate.


Commitment and Contingencies

The Company has no outstanding debt. The Company
meets its existing working capital and capital expenditures
needs from existing cash flow.

In 2001, the Company entered into an unsecured
credit facility for $10,000, with KeyBank National Association.
During 2001, there were no borrowings associated with this
credit facility and at December 31, 2001, there was no
outstanding balance. The credit facility consists of a $10,000
line of credit that matures on May 1, 2002. The Company
intends to renew the facility. Borrowings under this agreement
bear interest at Prime or LIBOR plus 2%, at the Companys
discretion.

The Company has obligations under non-cancelable
operating leases for real estate, equipment and distribution
agreements for satellite and cable space and FM radio channels.
Certain of the leases include renewal options and escalation
clauses. Real estate leases are for the Companys corporate
headquarters, sales offices, and data centers. Approximate
annual future commitments under non-cancelable operating leases
with lease terms in excess of one year are as follows (in
thousands):

|                             |  |               |        |              |  |   |       | 
|---------------------------- |  | ------------- | ------ | ------------ |  | - | ----- | 
|                             |  | Real Estate   |        | Distribution
|                             |  | and Equipment |        | Agreements  
|                             |  |               |        |             
|2002                         |  | $             | 10,305 |              |  | $ | 1,073 | 
|2003                         |  |               | 8,966  |              |  |   | 667   | 
|2004                         |  |               | 8,188  |              |  |   | 379   | 
|2005                         |  |               | 7,677  |              |  |   | 267   | 
|2006                         |  |               | 6,733  |              |  |   | 267   | 
|Thereafter                   |  |               | 29,572 |              |  |   |      | 
|                             |  |               |        |              |  |   |       | 
|Total minimum lease payments |  | $             | 71,441 |              |  | $ | 2,653 | 

The Company believes that no event beyond failure
to pay the lease obligations would jeopardize the Companys
operations.

Inflation

Although management believes that inflation has
not had a material effect on the results of its operations
during the past three years, there can be no assurance that the
Companys results of operations will not be affected by
inflation in the future.

Seasonality

The Company has not experienced any material
seasonal fluctuations in its business. However, financial
information market demand is largely dependent upon activity
levels in the securities markets. In the event that the U.S.
financial markets were to suffer a prolonged period of investor
inactivity in trading securities, the Companys business
could be adversely affected. The degree of such consequences is
uncertain. Exposures in this area are somewhat mitigated by the
Companys service offerings in non-U.S. markets.

Recently Issued Accounting
Pronouncements



| |                                                                         
| | ------------------------------------------------------------------------
| | Accounting for Business Combinations and
	Goodwill and Intangible Assets

In June 2001, the Financial Accounting Standards
Board (FASB), issued Financial Accounting Standard
No. 141, Business Combinations
(FAS 141) and Financial Accounting Standard
No. 142, Goodwill and Other Intangible Assets
(FAS 142). These statements amend the
accounting and reporting standards for business combinations,
goodwill and certain other intangible assets. FAS 141 is
effective for all business combinations initiated after
June 30, 2001. FAS 142 is effective for fiscal years
beginning after

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December 15, 2001. The Company has adopted
FAS 141 beginning July 1, 2001 and will adopt
FAS 142 on January 1, 2002. No material changes to the
carrying values of goodwill and other intangible assets as a
result of the adoption of FAS 142 are expected to be made.
Additionally, as a result of the adoption of FAS 142 the
Company will cease recording amortization expense associated
with its acquired goodwill. During 2001 this amortization was
$37,535.




Asset
Retirement Obligations

In August 2001, FASB issued Financial Accounting
Standard No. 143, Accounting for Asset Retirement
Obligations (FAS 143), which addresses
financial accounting and reporting for obligations associated
with the retirement of tangible long-lived assets and the
associated asset retirement costs. FAS No. 143 is required
to be adopted for fiscal years beginning after June 15,
2002. Management does not expect the adoption of this standard
to have any impact on the Companys financial position or
results of operations.





| |                                                                
| | ---------------------------------------------------------------
| | Accounting for the Impairment or Disposal
	of Long-Lived Assets

In October 2001, FASB issued Financial Accounting
Standard No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (FAS 144).
FAS 144 supersedes FASB Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long Lived Assets to Be Disposed of. FAS 144 applies
to all long-lived assets (including discontinued operations) and
consequently amends Accounting Principles Board Opinion
No. 30, Reporting Results of Operations 
Reporting the Effects of Disposal of a Segment of a
Business. FAS 144 is effective for financial
statements issued for fiscal years beginning after
December 15, 2001, and will thus be adopted by the Company,
as required, on January 1, 2002. Management does not
believe that the adoption of FAS 144 will have any impact
on its financial position and results of operations.

Forward-Looking Statements

From time to time, including in this filing, the
Company may publish forward-looking statements relating to such
matters as anticipated financial performance, business
prospects, critical accounting policies, technological
developments, new products, research and development activities
and similar matters. The Private Securities Litigation Reform
Act of 1995 provides a safe harbor for forward-looking
statements. The Company notes that a variety of factors could
cause the Companys actual results and experience to differ
materially from the anticipated results, or other expectations
expressed in the Companys forward-looking statements. The
risks and uncertainties that may affect the operations,
performance, development and results of the Companys
business include the following:



| |   |                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The presence of competitors with greater
	financial resources and their strategic response to the
	Companys services and products.                                                                                                                                                                          
|
| |  | Changes in technology, which could affect the
	competitiveness of the Companys products and services.                                                                                                                                                                                                       
|
| |  | A decline in activity levels in the securities
	markets, which could lower demand for the Companys
	services.                                                                                                                                                                                               
|
| |  | Consolidation of financial services. This
	consolidation has two forms: consolidations within an industry
	(such as banking) and across industries (such as consolidations
	of insurance, banking and brokerage companies). Such
	consolidations could lower demand for the Companys
	products and services.
|
| |  | Prolonged outage at one of Companys data
	centers. While the Company employs high reliability technology
	at its data centers, a prolonged outage at one of its data
	centers could have a material impact on revenues.                                                                                     
|
| |  | The acceptance of the Internet as a reliable
	real-time distribution platform by institutional customers.                                                                                                                                                                                                    

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| |   |                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The ability of the Company to broaden its
	subscriber base by adding more individual investors outside of
	the Companys traditional active-trader market.
|
| |  | The potential obsolescence of the Companys
	services due to the introduction of new technologies.                                                          






|         |                                                            
|-------- | -----------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures
	about Market Risk

A portion of the Companys business is
conducted outside the United States through its foreign
subsidiaries and branches. The Company has foreign currency
exposure related to its operations in international markets
where it transacts business in foreign currencies and
accordingly the Company is subject to exposure from adverse
movements in foreign currency exchange rates. For example, as
discussed above, the Companys growth in 2001 was adversely
affected by the strength of the US dollar over the
UK pound. The Companys foreign subsidiaries maintain
their accounting records in their local currencies.
Consequently, changes in currency exchange rates may impact the
translation of foreign statements of operations into
U.S. dollars, which may in turn affect the Companys
consolidated statements of operations.

The Company currently invests excess cash
balances in money market accounts. These accounts are largely
invested in U.S. Government obligations and investment
grade commercial paper; accordingly, the Company is exposed to
market risk related to changes in interest rates. The Company
believes that the effect, if any, of reasonable near-term
changes in interest rates on the Companys financial
position, results of operations, and cash flows will not be
material.

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Item 8.     Financial
Statements and Supplementary Data

|                                            |                                                                                                                       |      |    |    | 
|------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | ---- | -- | -- | 
|                                            |                                                                                                                       | Page
|                                            |                                                                                                                       |     
|Index to Consolidated Financial Statements: |                                                                                                                       |      |    |   
|Report of Independent Accountants           |                                                                                                                       |      | 23 |   
|                                            | Consolidated Statements of Operations and
	Comprehensive Income for the years ended December 31, 2001,
	2000 and 1999 |      |    | 24 | 
|                                            | Consolidated Balance Sheets as of
	December 31, 2001 and 2000                                                         |      |    | 25 | 
|                                            | Consolidated Statements of Cash Flows for the
	years ended December 31, 2001, 2000 and 1999                           |      |    | 26 | 
|                                            | Consolidated Statements of Stockholders
	Equity for the years ended December 31, 2001, 2000 and 1999                 |      |    | 27 | 
|Notes to Consolidated Financial Statements  |                                                                                                                       |      | 28 |   
|Quarterly Financial Information (Unaudited) |                                                                                                                       |      | 45 |   
|Index to Financial Statement Schedule:      |                                                                                                                       |      |    |   
|                                            | Schedule VIII Valuation and Qualifying
	Accounts                                                                      |      |    | 46 | 

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REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders

of Interactive Data Corporation:


In our opinion, the consolidated financial
statements listed in the accompanying index present fairly, in
all material respects, the financial position of Interactive
Data Corporation and its subsidiaries at December 31, 2001
and 2000, and the results of their operations and their cash
flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. In addition,
in our opinion, the financial statement schedule listed in the
accompanying index presents fairly, in all material respects,
the information set forth therein when read in conjunction with
the related consolidated financial statements. These financial
statements and financial statement schedule are the
responsibility of the Companys management; our
responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits.
We conducted our audits of these statements and schedule in
accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the
financial statements and schedule are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

/s/ PRICEWATERHOUSECOOPERS LLP

Boston, Massachusetts

February 4, 2002


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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
OPERATIONS

AND COMPREHENSIVE INCOME


|                                                   |                                         |                                       |         |         |         |      |          |         |         |   |         |        |         | 
|-------------------------------------------------- | --------------------------------------- | ------------------------------------- | ------- | ------- | ------- | ---- | -------- | ------- | ------- | - | ------- | ------ | ------- | 
|                                                   |                                         |                                      
|                                                   |                                         | Year Ended December 31,              
|                                                   |                                         |                                      
|                                                   |                                         | 2001                                  |         | 2000    |         | 1999
|                                                   |                                         |                                       |         |         |         |     
|                                                   |                                         |                                      
|                                                   |                                         | (In thousands, except per share data)
|SERVICE REVENUES                                   |                                         | $                                     | 340,002 |         |         | $    | 314,138  |         |         | $ | 188,956 |       
|COSTS AND EXPENSES                                 |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|                                                   | Cost of services                        |                                       |         | 103,618 |         |      |          | 105,524 |         |   |         | 55,031 |        
|                                                   | Selling, general and administrative     |                                       |         | 122,066 |         |      |          | 116,091 |         |   |         | 77,743 |        
|                                                   | Depreciation                            |                                       |         | 13,139  |         |      |          | 12,671  |         |   |         | 6,681  |        
|                                                   | Amortization                            |                                       |         | 75,526  |         |      |          | 82,943  |         |   |         | 31,897 |        
|                                                   |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|                                                   |                                         | Total costs and expenses              |         |         | 314,349 |      |          |         | 317,229 |   |         |        | 171,352 | 
|                                                   |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|INCOME (LOSS) FROM OPERATIONS                      |                                         |                                       | 25,653  |         |         |      | (3,091   | )       |         |   | 17,604  |       
|Equity in loss from MarketWatch.com, Inc.          |                                         |                                       |        |         |         |      | (67,229  | )       |         |   |        |       
|Other than temporary loss in MarketWatch.com, Inc. |                                         |                                       |        |         |         |      | (141,844 | )       |         |   |        |       
|Other income (expense), net                        |                                         |                                       | 2,882   |         |         |      | 1,170    |         |         |   | 241     |       
|                                                   |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|INCOME (LOSS) BEFORE INCOME TAXES                  |                                         |                                       | 28,535  |         |         |      | (210,994 | )       |         |   | 17,845  |       
|Income tax expense (benefit)                       |                                         |                                       | 24,223  |         |         |      | (67,522  | )       |         |   | 11,648  |       
|                                                   |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|NET INCOME (LOSS)                                  |                                         | $                                     | 4,312   |         |         | $    | (143,472 | )       |         | $ | 6,197   |       
|                                                   |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|Other comprehensive income (loss)                  |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|                                                   | Foreign currency translation adjustment |                                       |         | (1,779  | )       |      |          | (6,400  | )       |   |         | (1,051 | )      
|                                                   |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|COMPREHENSIVE INCOME (LOSS)                        |                                         | $                                     | 2,533   |         |         | $    | (149,872 | )       |         | $ | 5,146   |       
|                                                   |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|Weighted average shares:                           |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|                                                   | Basic                                   |                                       |         | 90,844  |         |      |          | 85,560  |         |   |         | 56,424 |        
|                                                   | Diluted                                 |                                       |         | 92,510  |         |      |          | 85,560  |         |   |         | 56,424 |        
|NET INCOME (LOSS) PER SHARE:                       |                                         |                                       |         |         |         |      |          |         |         |   |         |       
|                                                   | Basic                                   |                                       | $       | 0.05    |         |      | $        | (1.68   | )       |   | $       | 0.11   |        
|                                                   | Diluted                                 |                                       | $       | 0.05    |         |      | $        | (1.68   | )       |   | $       | 0.11   |        

The accompanying notes are an integral part of
these consolidated financial statements.

24



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##### Table of Contents



INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

|                                                                                                  |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |          |     |         | 
|------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | -------- | --- | ------- | ------- | -------- | --- | ------- | 
|                                                                                                  |                                                                                           |                                                                                                                                                               
|                                                                                                  |                                                                                           | December 31                                                                                                                                                   
|                                                                                                  |                                                                                           |                                                                                                                                                               
|                                                                                                  |                                                                                           | 2001                                                                                                                                                           |                                            | 2000    
|                                                                                                  |                                                                                           |                                                                                                                                                                |                                            |         
|                                                                                                  |                                                                                           |                                                                                                                                                               
|                                                                                                  |                                                                                           | (In thousands,                                                                                                                                                
|                                                                                                  |                                                                                           | except for share data)                                                                                                                                        
|ASSETS                                                                                            |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|Current Assets:                                                                                   |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|Cash and cash equivalents                                                                         |                                                                                           | $                                                                                                                                                              | 118,522                                    |          |     | $       | 38,652  |         
|Accounts receivable, net of allowance for
	doubtful accounts of $4,293 at 2001 and $3,819 at 2000 |                                                                                           |                                                                                                                                                                | 46,792                                     |          |     |         | 50,125  |         
|Receivable from affiliate                                                                         |                                                                                           |                                                                                                                                                                | 7                                          |          |     |         | 1,403   |         
|Prepaid expenses and other current assets                                                         |                                                                                           |                                                                                                                                                                | 3,152                                      |          |     |         | 3,676   |         
|Investments                                                                                       |                                                                                           |                                                                                                                                                                |                                           |          |     |         | 39,388  |         
|Deferred income taxes                                                                             |                                                                                           |                                                                                                                                                                | 13,207                                     |          |     |         | 12,749  |         
|                                                                                                  |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|                                                                                                  |                                                                                           |                                                                                                                                                                | Total current assets                       |          |     | 181,680 |         |          |     | 145,993 | 
|Property and equipment, net                                                                       |                                                                                           |                                                                                                                                                                | 38,431                                     |          |     |         | 37,188  |         
|Goodwill, net of accumulated amortization of
	$127,189 at 2001 and $90,629 at 2000                |                                                                                           |                                                                                                                                                                | 353,748                                    |          |     |         | 395,696 |         
|Other intangible assets, net                                                                      |                                                                                           |                                                                                                                                                                | 121,040                                    |          |     |         | 159,515 |         
|Other assets                                                                                      |                                                                                           |                                                                                                                                                                | 3,084                                      |          |     |         | 3,698   |         
|                                                                                                  |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|Total assets                                                                                      |                                                                                           | $                                                                                                                                                              | 697,983                                    |          |     | $       | 742,090 |         
|                                                                                                  |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|LIABILITIES AND STOCKHOLDERS
	EQUITY                                                             |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|Current Liabilities:                                                                              |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|                                                                                                  | Accounts payable, trade                                                                   |                                                                                                                                                                | $                                          | 11,814   |     |         | $       | 13,364   |    
|                                                                                                  | Accrued liabilities                                                                       |                                                                                                                                                                |                                            | 50,684   |     |         |         | 48,318   |    
|                                                                                                  | Payables to affiliates                                                                    |                                                                                                                                                                |                                            | 5,065    |     |         |         | 2,004    |    
|                                                                                                  | Income taxes payable                                                                      |                                                                                                                                                                |                                            | 13,578   |     |         |         | 12,309   |    
|                                                                                                  | Deferred revenue                                                                          |                                                                                                                                                                |                                            | 24,477   |     |         |         | 26,659   |    
|                                                                                                  |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|                                                                                                  |                                                                                           |                                                                                                                                                                | Total current liabilities                  |          |     | 105,618 |         |          |     | 102,654 | 
|                                                                                                  | Deferred tax liabilities                                                                  |                                                                                                                                                                |                                            | 8,209    |     |         |         | 13,425   |    
|                                                                                                  | Other liabilities                                                                         |                                                                                                                                                                |                                            | 1,489    |     |         |         | 3,499    |    
|                                                                                                  |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|                                                                                                  |                                                                                           |                                                                                                                                                                | Total Liabilities                          |          |     | 115,316 |         |          |     | 119,578 | 
|Commitments and contingencies (Note 14)                                                           |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|Stockholders Equity:                                                                             |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|                                                                                                  | Preferred Stock                                                                           |                                                                                                                                                                |                                            |         |     |         |         |         |    
|                                                                                                  | Common stock $0.01 par value                                                              |                                                                                                                                                                |                                            |          |     |         |         |          |    
|                                                                                                  |                                                                                           | Authorized: 200,000,000 shares; 92,245,419 issued
	and 90,245,419 outstanding at December 31, 2001 and
	91,202,428 issued and outstanding at December 31, 2000 |                                            |          | 922 |         |         |          | 912 |        
|                                                                                                  | Additional paid-in capital                                                                |                                                                                                                                                                |                                            | 771,084  |     |         |         | 789,199  |    
|                                                                                                  | Treasury Stock, at cost, 2,000 and 0 Shares, at
	December 31, 2001 and 2000, respectively |                                                                                                                                                                |                                            | (24,273  | )   |         |         |         |    
|                                                                                                  | Accumulated deficit                                                                       |                                                                                                                                                                |                                            | (155,131 | )   |         |         | (159,443 | )  
|                                                                                                  | Accumulated other comprehensive loss                                                      |                                                                                                                                                                |                                            | (9,935   | )   |         |         | (8,156   | )  
|                                                                                                  |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|                                                                                                  |                                                                                           |                                                                                                                                                                | Total Stockholders Equity                 |          |     | 582,667 |         |          |     | 622,512 | 
|                                                                                                  |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         
|                                                                                                  |                                                                                           |                                                                                                                                                                | Total Liabilities and Stockholders Equity |          | $   | 697,983 |         |          | $   | 742,090 | 
|                                                                                                  |                                                                                           |                                                                                                                                                                |                                            |          |     |         |         |         

The accompanying notes are an integral part of
these consolidated financial statements.

25



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##### Table of Contents



INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                          |                                                          |                        |         |         |   |      |          |         |   |   |          |          |  
|----------------------------------------------------------------------------------------- | -------------------------------------------------------- | ---------------------- | ------- | ------- | - | ---- | -------- | ------- | - | - | -------- | -------- | -
|                                                                                          |                                                          |                       
|                                                                                          |                                                          | Year Ended December 31
|                                                                                          |                                                          |                       
|                                                                                          |                                                          | 2001                   |         | 2000    |   | 1999
|                                                                                          |                                                          |                        |         |         |   |     
|                                                                                          |                                                          |                       
|                                                                                          |                                                          | (In thousands)        
|Cash flows provided by (used in) operating
	activities:                                   |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|Net income (loss)                                                                         |                                                          | $                      | 4,312   |         |   | $    | (143,472 | )       |   | $ | 6,197    |         
|Adjustments to reconcile net income
	(loss) to net cash provided by operating activities: |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|                                                                                          | Depreciation and amortization                            |                        |         | 88,665  |   |      |          | 95,614  |   |   |          | 38,578   |  
|                                                                                          | Tax benefit from exercise of stock options               |                        |         | 2,682   |   |      |          | 499     |   |   |          |         |  
|Equity in loss from MarketWatch.com, Inc.                                                 |                                                          |                        |        |         |   |      | 67,229   |         |   |   |         |         
|Other than temporary loss from investment in
	MarketWatch.com, Inc.                       |                                                          |                        |        |         |   |      | 141,844  |         |   |   |         |         
|                                                                                          | Deferred income taxes                                    |                        |         | (7,928  | ) |      |          | (83,618 | ) |   |          | (3,350   | )
|Other non-cash items, net                                                                 |                                                          |                        | 267     |         |   |      | 113      |         |   |   |         |         
|Changes in operating assets and liabilities, net:                                         |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|                                                                                          | Accounts receivable and due from affiliates              |                        |         | 4,943   |   |      |          | (5,731  | ) |   |          | (6,923   | )
|                                                                                          | Prepaid expenses and other assets                        |                        |         | 1,355   |   |      |          | 1,209   |   |   |          | 1,960    |  
|                                                                                          | Accounts and taxes payable and due to affiliates         |                        |         | 628     |   |      |          | (6,362  | ) |   |          | 556      |  
|                                                                                          | Other current liabilities and accrued expenses           |                        |         | 789     |   |      |          | (322    | ) |   |          | 4,553    |  
|                                                                                          | Deferred revenue                                         |                        |         | (1,901  | ) |      |          | (2,053  | ) |   |          | (2,261   | )
|                                                                                          |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                                 |                                                          |                        | 93,812  |         |   |      | 64,950   |         |   |   | 39,310   |         
|                                                                                          |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|Cash flows provided by (used in) investing
	activities:                                   |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|                                                                                          | Purchase of fixed assets                                 |                        |         | (12,609 | ) |      |          | (15,699 | ) |   |          | (7,920   | )
|                                                                                          | Cash acquired through merger                             |                        |         |        |   |      |          | 48,402  |   |   |          |         |  
|                                                                                          | Investment in MarketWatch.com, Inc.                      |                        |         |        |   |      |          | (43,000 | ) |   |          |         |  
|                                                                                          | Acquisition of businesses                                |                        |         |        |   |      |          | (14,766 | ) |   |          | (149,078 | )
|                                                                                          | Net proceeds from sales of investments and
	business     |                        |         | 43,224  |   |      |          |        |   |   |          |         |  
|                                                                                          | Other investing activities                               |                        |         | 719     |   |      |          |        |   |   |          |         |  
|                                                                                          |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|NET CASH PROVIDED BY (USED IN) INVESTING
	ACTIVITIES                                      |                                                          |                        | 31,334  |         |   |      | (25,063  | )       |   |   | (156,998 | )       
|                                                                                          |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|Cash flows provided by (used in) financing
	activities:                                   |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|                                                                                          | Receipt of payment from affiliate                        |                        |         |        |   |      |          | 19,224  |   |   |          |         |  
|                                                                                          | Payment of promissory note to affiliate                  |                        |         |        |   |      |          | (20,000 | ) |   |          |         |  
|                                                                                          | Proceeds from exercise of stock options                  |                        |         | 6,084   |   |      |          | 402     |   |   |          |         |  
|                                                                                          | Contribution (distribution) of capital from
	(to) parent |                        |         |        |   |      |          | (10,764 | ) |   |          | 114,071  |  
|                                                                                          | Purchase of treasury stock                               |                        |         | (24,273 | ) |      |          |        |   |   |          |         |  
|                                                                                          | Distribution of dividends                                |                        |         | (26,871 | ) |      |          |        |   |   |          |         |  
|                                                                                          |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|NET CASH PROVIDED BY (USED IN) FINANCING
	ACTIVITIES                                      |                                                          |                        | (45,060 | )       |   |      | (11,138  | )       |   |   | 114,071  |         
|Effect of exchange on cash                                                                |                                                          |                        | (216    | )       |   |      | (2,105   | )       |   |   | 588      |         
|                                                                                          |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|NET INCREASE (DECREASE) IN CASH AND CASH
	EQUIVALENTS                                     |                                                          |                        | 79,870  |         |   |      | 26,644   |         |   |   | (3,029   | )       
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                          |                                                          |                        | 38,652  |         |   |      | 12,008   |         |   |   | 15,037   |         
|                                                                                          |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                |                                                          | $                      | 118,522 |         |   | $    | 38,652   |         |   | $ | 12,008   |         
|                                                                                          |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|Supplemental disclosure of cash flow information:                                         |                                                          |                        |         |         |   |      |          |         |   |   |          |         
|                                                                                          | Cash paid for taxes                                      |                        | $       | (29,007 | ) |      | $        | (9,489  | ) |   | $        | (13,217  | )
|                                                                                          | Cash (paid) received for interest                        |                        | $       | 3,050   |   |      | $        | (1,591  | ) |   | $        | (1,138   | )

The accompanying notes are an integral part of
these consolidated financial statements.

26



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##### Table of Contents



INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY

|                                                   |  |                |        |           |  |           |     |            |  |         |       |               |  |        |         |             |  |               |         |   |  |   |          |   |  |   |        |   |  |   |          |   |  |   |          |  
|-------------------------------------------------- |  | -------------- | ------ | --------- |  | --------- | --- | ---------- |  | ------- | ----- | ------------- |  | ------ | ------- | ----------- |  | ------------- | ------- | - |  | - | -------- | - |  | - | ------ | - |  | - | -------- | - |  | - | -------- | -
|                                                   |  |                |        |           |  |           |     |            |  |         |       | Accumulated   |  |        |         |            
|                                                   |  | Common Stock   |        | Treasury  |  |           |     |            |  |         |       | Other         |  |        |         |            
|                                                   |  |                |        | Stock     |  | Treasury  |     | Additional |  |         |       | Comprehensive |  |        |         | Total      
|                                                   |  | Number of      |        |           |  | Number of |     | Stock      |  | Paid in |       | Parents      |  | Income |         | Accumulated |  | Stockholders
|                                                   |  | Shares         |        | Par Value |  | Shares    |     | Costs      |  | Capital |       | Investment    |  | (Loss) |         | Deficit     |  | Equity       
|                                                   |  |                |        |           |  |           |     |            |  |         |       |               |  |        |         |             |  |              
|                                                   |  |               
|                                                   |  | (In thousands)
|Balance, December 31, 1998                         |  |                |       |           |  | $         |    |            |  |         |      |               |  | $      |        |             |  | $             |        |   |  | $ | 244,609  |   |  | $ | (705   | ) |  | $ | (22,168  | ) |  | $ | 221,736  |  
|Investment by Parent                               |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               |        |   |  |   | 114,071  |   |  |   |       |   |  |   |         |   |  |   | 114,071  |  
|Other comprehensive loss                           |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               |        |   |  |   |         |   |  |   | (1,051 | ) |  |   |         |   |  |   | (1,051   | )
|Net income                                         |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               |        |   |  |   |         |   |  |   |       |   |  |   | 6,197    |   |  |   | 6,197    |  
|                                                   |  |                |        |           |  |           |     |            |  |         |       |               |  |        |         |             |  |               |         |   |  |   |          |   |  |   |        |   |  |   |          |   |  |   |          |  
|Balance, December 31, 1999                         |  |                |       |           |  | $         |    |            |  |         |      |               |  | $      |        |             |  | $             |        |   |  | $ | 358,680  |   |  | $ | (1,756 | ) |  | $ | (15,971  | ) |  | $ | 340,953  |  
|Distribution to Parent                             |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               |        |   |  |   | (7,764   | ) |  |   |       |   |  |   |         |   |  |   | (7,764   | )
|Reorganization (Note 3)                            |  |                | 56,424 |           |  |           | 564 |            |  |         |      |               |  |        |        |             |  |               | 350,352 |   |  |   | (350,916 | ) |  |   |       |   |  |   |         |   |  |   |         |  
|Issuance of shares associated with merger (Note 3) |  |                | 34,586 |           |  |           | 346 |            |  |         |      |               |  |        |        |             |  |               | 437,948 |   |  |   |         |   |  |   |       |   |  |   |         |   |  |   | 438,294  |  
|Exercise of stock options                          |  |                | 192    |           |  |           | 2   |            |  |         |      |               |  |        |        |             |  |               | 400     |   |  |   |         |   |  |   |       |   |  |   |         |   |  |   | 402      |  
|Tax benefit from exercise of stock options         |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               | 499     |   |  |   |         |   |  |   |       |   |  |   |         |   |  |   | 499      |  
|Other comprehensive loss                           |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               |        |   |  |   |         |   |  |   | (6,400 | ) |  |   |         |   |  |   | (6,400   | )
|Net loss                                           |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               |        |   |  |   |         |   |  |   |       |   |  |   | (143,472 | ) |  |   | (143,472 | )
|                                                   |  |                |        |           |  |           |     |            |  |         |       |               |  |        |         |             |  |               |         |   |  |   |          |   |  |   |        |   |  |   |          |   |  |   |          |  
|Balance, December 31, 2000                         |  |                | 91,202 |           |  | $         | 912 |            |  |         |      |               |  | $      |        |             |  | $             | 789,199 |   |  | $ |         |   |  | $ | (8,156 | ) |  | $ | (159,443 | ) |  | $ | 622,512  |  
|Distribution of dividend                           |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               | (26,871 | ) |  |   |         |   |  |   |       |   |  |   |         |   |  |   | (26,871  | )
|Exercise of stock options                          |  |                | 1,043  |           |  |           | 10  |            |  |         |      |               |  |        |        |             |  |               | 6,074   |   |  |   |         |   |  |   |       |   |  |   |         |   |  |   | 6,084    |  
|Tax benefit from exercise of stock options         |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               | 2,682   |   |  |   |         |   |  |   |       |   |  |   |         |   |  |   | 2,682    |  
|Purchase of treasury stock                         |  |                |       |           |  |           |    |            |  |         | 2,000 |               |  |        | (24,273 | )           |  |               |        |   |  |   |         |   |  |   |       |   |  |   |         |   |  |   | (24,273  | )
|Other comprehensive income                         |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               |        |   |  |   |         |   |  |   | (1,779 | ) |  |   |         |   |  |   | (1,779   | )
|Net income                                         |  |                |       |           |  |           |    |            |  |         |      |               |  |        |        |             |  |               |        |   |  |   |         |   |  |   |       |   |  |   | 4,312    |   |  |   | 4,312    |  
|                                                   |  |                |        |           |  |           |     |            |  |         |       |               |  |        |         |             |  |               |         |   |  |   |          |   |  |   |        |   |  |   |          |   |  |   |          |  
|Balance, December 31, 2001                         |  |                | 92,245 |           |  | $         | 922 |            |  |         | 2,000 |               |  | $      | (24,273 | )           |  | $             | 771,084 |   |  | $ |         |   |  | $ | (9,935 | ) |  | $ | (155,131 | ) |  | $ | 582,667  |  
|                                                   |  |                |        |           |  |           |     |            |  |         |       |               |  |        |         |             |  |               |         |   |  |   |          |   |  |   |        |   |  |   |          |   |  |   |          |  

The accompanying notes are an integral part of
these consolidated financial statements.

27



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##### Table of Contents



INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(In Thousands)


(except per share data)


1.     Summary of
Significant Accounting Policies

Nature of
Business

Interactive Data Corporation (the
Company) is a leading global provider of financial
and business information to individual and institutional
investors. The Company supplies time sensitive pricing,
dividend, corporate action and descriptive information for more
than 3.5 million securities traded around the world,
including hard-to-value fixed income instruments. The cores of
the business are its extensive database expertise and technology
resources.

The Company delivers real-time, end-of-day and
historically archived data to customers through a variety of
products featuring Internet, dedicated line, satellite and
dial-up protocols. Through a broad range of partnerships, the
Company provides links to most of the worlds best-known
financial service and software companies for trading, analysis,
portfolio management and valuation.

On February 29, 2000, Data Broadcasting
Corporation completed a merger (the Merger) with
Interactive Data Corporation (now known as FT Interactive Data
Corporation), a wholly owned subsidiary of Pearson Longman, Inc.
(Pearson Longman). Pearson Longman, through a series
of other entities, is wholly owned by Pearson plc
(Pearson). Upon the Merger, the Company issued
56,424 shares of its common stock to Pearson Longman that
resulted in the ownership by Pearson Longman of approximately
60% of the Company. (Interactive Data Corporation prior to the
Merger is referred to herein as FT Interactive Data Corporation
which continues to be the Companys major institutional
services subsidiary.) The Merger was accounted for as a reverse
merger as discussed in Note 3 to the consolidated financial
statements. The shares of the Company were subsequently
transferred to Pearson DBC Holdings, Inc., another wholly owned
subsidiary of Pearson Longman.

At the Annual Meeting of the Company held on
June 15, 2001, holders of a majority of the Companys
common stock approved a proposal to amend the Certificate of
Incorporation to change the Companys name from Data
Broadcasting Corporation to Interactive Data Corporation. The
Corporations common stock is traded on The Nasdaq National
Market and effective as of June 20, 2001, it trades under the
trading symbol: IDCO.

Principles of
Consolidation

The consolidated financial statements include the
results of the Company and all majority-owned subsidiaries. All
significant intercompany accounts and transactions have been
eliminated.

Reclassifications

Certain prior year amounts have been reclassified
to conform with the current years presentation. These
reclassifications had no effect on the Companys results of
operations.

Cash and Cash
Equivalents

Cash and cash equivalents include cash on hand
and short-term investments with an original maturity of three
months or less. At December 31, 2001, the Company had
$94,911 held as cash equivalents.

Fair Value of
Financial Instruments

The carrying amount of cash, cash equivalents,
trade receivables and trade payables approximates their fair
value because of the short maturity of these investments.

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Revenue
Recognition

Revenues are recognized over contractual periods
as services are performed. The Company accounts for subscription
revenues received in advance of providing services by deferring
such amounts until the related services are performed.

Accounts
Receivable, Concentration of Credit Risk and
Uncertainties

The Company is subject to credit risk through
trade receivables. Credit risk with respect to trade receivables
is mitigated by the diversification of the Companys
operations, as well as its large client base and its
geographical dispersion. No single customer accounts for more
than 10% of revenues or more than 10% of accounts receivable for
any period presented. Ongoing credit evaluations of
customers financial condition are performed and collateral
is not required. The Company maintains reserves for potential
credit losses and such losses, in the aggregate, have not
exceeded managements expectations.

In addition, the Company has temporary cash
investments. At December 31, 2001 approximately $94,911 of
cash equivalents were deposited in money market accounts. These
accounts are largely invested in U.S. Government obligations and
investment grade commercial paper, thereby limiting credit risk.
At December 31, 2001, the Company believes that it had no
significant concentrations of credit risk.

Income
Taxes

In accordance with Statement of Financial
Accounting Standards No. 109, Accounting for Income
Taxes, deferred tax assets and liabilities are determined
based on differences between the financial reporting and the tax
basis of assets and liabilities and are measured by applying
enacted tax rates and laws to taxable years in which such
differences are expected to reverse. The Companys practice
is to provide currently for taxes that will be payable upon
remittance of foreign earnings of subsidiaries and affiliates to
the extent that such earnings are not considered to be
reinvested indefinitely. The Companys practice is to
permanently reinvest the unremitted earnings of its
subsidiaries, and accordingly no taxes have been provided for
these amounts.

Goodwill

Goodwill of $267,786 and $216,221 at
December 31, 2001 was recorded in connection with business
acquisitions and is being amortized on a straight-line basis
over ten and twenty years, respectively. Goodwill represents the
excess purchase price over the fair value of identifiable net
assets at the acquisition date.

Other
Intangible Assets

Other intangible assets include securities
databases, computer software, covenants not to compete, customer
lists, and work forces arising principally from acquisitions.
Such intangibles are valued on the acquisition dates based on a
combination of replacement cost and comparable purchase
methodologies by a third party appraiser and are amortized over
periods ranging from two to fourteen years. The carrying amount
of these balances is evaluated periodically in relation to the
operating performance and estimated undiscounted future cash
flows of the underlying assets. Adjustments are made if the sum
of expected future net cash flows is less than book value.

Property and
Equipment

Fixed assets are recorded at cost. Equipment is
depreciated using the straight-line method over its estimated
useful life of three to eight years. Leasehold improvements are
amortized using the straight-line method over the terms of the
respective leases or useful lives, whichever is shorter.
Maintenance and repairs

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

are charged to operations as incurred.
Retirements, sales and disposals of assets are recorded by
removing the cost and accumulated depreciation from the asset
and accumulated depreciation accounts.

Software
Development Costs

The Company capitalizes certain costs incurred to
produce certain software used by subscribers to access, manage
and analyze information in the Companys databases. Such
costs, including coding, testing and product quality assurance,
are capitalized once technological feasibility has been
established. Amortization is computed on a case-by-case basis
over the estimated economic life of the software, which ranges
from three to five years. In 2001, such amortization amounted to
approximately $584. At December 31, 2001, the remaining
book value of the software was $3,591.

The Company capitalizes certain costs incurred in
connection with the development of internal use software. These
costs are capitalized in accordance with Statement of Position
98-1, Accounting for Costs of Computer Software Developed
or Obtained for Internal Use. The Company capitalized
approximately $1,712 during the year ended December 31,
2001 primarily related to the purchase and development of new
computer systems. In 2001, amortization expense associated with
this software was $477.

Translation
of Foreign Currencies

The functional currency of certain businesses
within the consolidated financial statements is the local
currency. Assets and liabilities of foreign companies are
translated into U.S. dollars at exchange rates in effect at
the balance sheet date; income and expense items and cash flows
are translated at average exchange rates for the period.
Cumulative net translation adjustments are included in
stockholders equity as other comprehensive income. Gains
and losses resulting from foreign currency transactions, not
significant in amount, are included in the results of operations
as other income (expense).

Use of
Estimates

The preparation of the consolidated financial
statements in conformity with accounting principles generally
accepted in the United States of America requires the extensive
use of managements estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the consolidated financial
statement date. Actual results could differ from those estimates.

Research and
Development Costs

Expenditures for research and development are
expensed as incurred. The Company expensed approximately $2,327,
$2,675 and $0, in research and development costs during the
years ended December 31, 2001, 2000 and 1999, respectively,
primarily related to the development of new services.

Advertising
Costs

Advertising expenditures consists of print media,
radio, television, direct marketing and trade shows. All
advertising expenses are charged to income during the period
incurred and totaled $4,484, $6,825 and $991 for the years ended
December 31, 2001, 2000, and 1999, respectively.

Stock-Based
Compensation

The Company follows Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to
Employees (APB No. 25) in accounting for
its employee stock options, rather than the fair value method of
accounting provided under Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based
Compensation (SFAS No. 123). Under APB
No. 25, the Company does not recognize compensa-

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

tion expense on stock options granted to
employees because the exercise price of each option is equal to
the market price of the underlying stock on the date of the
grant.

Earnings per
Share

The Company calculates its earnings per share in
accordance with Financial Accounting Standards No. 128,
Earnings per Share. Below is a reconciliation of the
weighted average shares outstanding (in thousands) between the
basic and diluted calculations for each period.

|                           |  |      |        |      |  |      |        |  |  |  |        | 
|-------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                           |  | 2001 |        | 2000 |  | 1999
|                           |  |      |        |      |  |     
|Basic shares               |  |      | 90,844 |      |  |      | 85,560 |  |  |  | 56,424 | 
|Stock options and warrants |  |      | 1,666  |      |  |      |       |  |  |  |       | 
|                           |  |      |        |      |  |      |        |  |  |  |        | 
|Diluted shares             |  |      | 92,510 |      |  |      | 85,560 |  |  |  | 56,424 | 
|                           |  |      |        |      |  |      |        |  |  |  |        | 

Due to the net loss in 2000, the effect of the
options would have been anti-dilutive and therefore such options
were excluded from the calculation of diluted earnings per
share. Prior to 2000, there were no options outstanding, as
discussed in Note 11.

Long-lived
Assets

The Company evaluates the recoverability of its
long-lived assets in accordance with Statement of Financial
Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of (SFAS 121). SFAS 121
requires recognition of impairment of long-lived assets in the
event the net book value of such assets exceeds the future
undiscounted cash flows attributable to such assets.

The Company reviews long-lived assets, including
goodwill, for impairment whenever events or changes in business
circumstances indicate that the carrying amount of the assets
may not be fully recoverable or that the useful lives of these
assets are no longer appropriate. Each impairment test is based
on a comparison of the undiscounted cash flows to the recorded
value of the asset. If an impairment is indicated, the asset is
written down to its estimated fair value on a discounted cash
flow basis.

2.     New Accounting
Pronouncements

Accounting
for Business Combinations and Goodwill and Intangible
Assets

In June 2001, FASB issued Financial Accounting
Standard No. 141, Business Combinations
(FAS 141) and Financial Accounting Standard
No. 142, Goodwill and Other Intangible Assets
(FAS 142). These statements amend the
accounting and reporting standards for business combinations,
goodwill and certain other intangible assets. FAS 141 is
effective for all business combinations initiated after
June 30, 2001. FAS 142 is effective for fiscal years
beginning after December 15, 2001. The Company will
implement these pronouncements in its financial statements on
their respective effective dates. No material changes to the
carrying values of goodwill and other intangible assets as a
result of the adoption of FAS 142 are expected to be made.

Asset
Retirement Obligations

In August 2001, FASB issued Financial Accounting
Standard No. 143, Accounting for Asset Retirement
Obligations (FAS 143), which addresses
financial accounting and reporting for obligations associated
with the retirement of tangible long-lived assets and the
associated asset retirement costs. FAS No. 143 is required
to be adopted for fiscal years beginning after June 15,
2002. Management does not expect the adoption of this standard
to have any impact on the Companys financial position or
results of operations.

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Accounting
for the Impairment or Disposal of Long-Lived
Assets

In October 2001, FASB issued Financial Accounting
Standard No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (FAS 144).
FAS 144 supersedes FASB Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long Lived Assets to Be Disposed of. FAS 144 applies
to all long-lived assets (including discontinued operations) and
consequently amends Accounting Principles Board Opinion
No. 30 (APB 30), Reporting Results
of Operations  Reporting the Effects of Disposal of a
Segment of a Business. FAS 144 is effective for
financial statements issued for fiscal years beginning after
December 15, 2001, and will thus be adopted by the Company,
as required, on January 1, 2002. Management does not
believe that the adoption of FAS 144 will have any impact
on its financial position and results of operations.

3.     Merger of Data
Broadcasting Corporation and Interactive Data
Corporation

On February 29, 2000, Data Broadcasting
Corporation completed the Merger with Interactive Data
Corporation, a wholly owned subsidiary of Pearson Longman.
Pearson Longman, through a series of other entities, is wholly
owned by Pearson. Upon the Merger, the Company issued 56,424
shares of its common stock to Pearson Longman that resulted in
the ownership by Pearson Longman of approximately 60% of the
Company. (Interactive Data Corporation prior to the Merger is
referred to herein as FT Interactive Data Corporation which
continues to be the Companys major institutional services
subsidiary.)

The Merger has been accounted for as a reverse
acquisition. Accordingly, the historical financial statements of
FT Interactive Data Corporation are the historical financial
statements of the Company.

The Merger was accounted for as follows:

|                                      |                |                      |         |        |         | 
|------------------------------------- | -------------- | -------------------- | ------- | ------ | ------- | 
|Assets acquired                       |                |                      |         |       
|Cash and cash equivalents             |                | $                    | 48,402  |       
|Accounts receivable                   |                |                      | 12,457  |       
|Fixed assets                          |                |                      | 16,863  |       
|Other assets                          |                |                      | 4,475   |       
|Goodwill                              |                |                      | 205,516 |       
|Investment in MarketWatch.com, Inc.   |                |                      | 192,960 |       
|Other intangibles assets:             |                |                      |         |       
|                                      | Customer Lists |                      |         | 72,300 |        
|                                      | Workforce      |                      |         | 4,400  |        
|                                      | Technology     |                      |         | 8,000  |        
|                                      |                |                      |         |       
|                                      |                |                      | 565,373 |       
|Liabilities assumed                   |                |                      |         |       
|Accounts payable and accrued expenses |                |                      | 22,956  |       
|Deferred revenue                      |                |                      | 12,846  |       
|Other liabilities                     |                |                      | 2,387   |       
|Deferred tax liabilities              |                |                      | 77,537  |       
|Accrued professional costs            |                |                      | 2,300   |       
|Accrued acquisition costs             |                |                      | 9,053   |       
|                                      |                |                      |         |       
|                                      |                |                      | 127,079 |       
|                                      |                | Total Purchase Price |         | $      | 438,294 | 

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Goodwill is being amortized over ten years.
Intangible assets are being amortized between two and eleven
years. Accrued professional costs include investment banking,
accounting and legal services. As of December 31, 2000, all
accrued professional costs have been paid. Accrued acquisition
costs include severance, relocation and lease termination costs.
As of December 31, 2001, accrued acquisition costs
remaining were $2,663. An additional $3,000 of acquisition costs
were funded by Pearson and treated as additional goodwill and a
capital contribution.

Accrued acquisition costs are comprised of the
following:

|                           |  |           |       |              |  |       |       |       |  |   |     |  |  |   |       | 
|-------------------------- |  | --------- | ----- | ------------ |  | ----- | ----- | ----- |  | - | --- |  |  | - | ----- | 
|                           |  | Employee  |       | Lease        |  |       |       |      
|                           |  | Severance |       | Terminations |  | Other |       | Total
|                           |  |           |       |              |  |       |       |      
|Original Amount            |  | $         | 6,613 |              |  | $     | 1,591 |       |  | $ | 884 |  |  | $ | 9,088 | 
|2000 payments/adjustments  |  |           | 3,778 |              |  |       | 6     |       |  |   | 549 |  |  |   | 4,333 | 
|                           |  |           |       |              |  |       |       |       |  |   |     |  |  |   |       | 
|Balance, December 31, 2000 |  |           | 2,835 |              |  |       | 1,585 |       |  |   | 335 |  |  |   | 4,755 | 
|2001 payments/adjustments  |  |           | 1,245 |              |  |       | 702   |       |  |   | 145 |  |  |   | 2,092 | 
|                           |  |           |       |              |  |       |       |       |  |   |     |  |  |   |       | 
|Balance, December 31, 2001 |  | $         | 1,590 |              |  | $     | 883   |       |  | $ | 190 |  |  | $ | 2,663 | 
|                           |  |           |       |              |  |       |       |       |  |   |     |  |  |   |       | 

The following unaudited pro forma financial
information reflects the Merger, the transaction discussed in
Note 4 , the acquisition discussed in Note 5 and the
sale discussed in Note 6 as if they occurred on
January 1, 1999:

|                   |  |                   |         |      |  |   |         |  
|------------------ |  | ----------------- | ------- | ---- |  | - | ------- | -
|                   |  |                  
|                   |  | Pro Forma Results
|                   |  | for Years Ended  
|                   |  | December 31,     
|                   |  |                  
|                   |  | 2000              |         | 1999
|                   |  |                   |         |     
|Revenue            |  | $                 | 326,438 |      |  | $ | 311,258 |  
|Net Loss           |  | $                 | (20,608 | )    |  | $ | (72,864 | )
|Net loss per share |  | $                 | (.23    | )    |  | $ | (.80    | )

4.     Investment in
MarketWatch.com, Inc.

In connection with the transaction described in
Note 3, the Companys investment in MarketWatch.com,
Inc. (MarketWatch) was written up to its fair value
on February 29, 2000 of $192,960. This amount exceeded the
Companys share of the underlying equity of MarketWatch on
that date by $148,686. This excess was being amortized over
three years.

On December 27, 2000, the Company entered
into an agreement with an affiliate of Pearson to sell its 34.4%
ownership in MarketWatch for $26,888. As a result of this sale,
the Company recorded an other than temporary loss of $141,844 in
2000 in connection with this transaction. The balance sheet at
December 31, 2000 included an investment in MarketWatch of
$26,888, which represented the related proceeds received in
January 2001.

On January 16, 2001, the Company paid a
special dividend of $26,871 to stockholders of record on
January 8, 2001. This dividend related to the proceeds
received from the sale of the Companys investment in
MarketWatch, less $17 paid in administrative related fees.

The Company purchased news and web advertising
from MarketWatch in the amount of $1,381 and $143, respectively,
for the twelve months ended December 31, 2001. The Company
had provided services to MarketWatch including accounting,
network operations, web hosting and data feeds, which ended as
of March 31, 2001. The Company charged MarketWatch $112 for
such services for the twelve months ended December 31,
2001; these amounts were recorded as reductions of the gross
expenses incurred by the Company.

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

5.     Acquisitions

On July 29, 1999, FT Interactive Data
acquired 100% of the outstanding capital stock of Muller Data
Corporation (Muller Data) and the assets of MuniView
and Valorinform (collectively, the Acquired
Businesses). The Acquired Businesses were under common
control at the time of the acquisition, and primarily engaged in
the business of the collection, analysis, marketing and
distribution of financial information relating to certain
securities. The price paid for the Acquired Businesses was
$149,078 and was funded by a capital contribution from Pearson
Longman. In addition, FT Interactive Data incurred acquisition
costs of $2,500, including $1,100 for the termination of certain
employees. As of December 31, 2001, total remaining accrued
acquisition costs related to severance are $266, which are
expected to be paid by December 31, 2002.

The acquisition was accounted for using the
purchase method of accounting. Accordingly, the purchase price
assigned to the assets acquired and liabilities assumed was
based on the fair market value on the acquisition date. The
excess of the consideration paid over the estimated fair value
of net tangible assets acquired has been recorded as goodwill
and other intangible assets. Goodwill is being amortized over a
period of ten years and intangibles are being amortized over
periods ranging from two to fourteen years. The Companys
consolidated financial statements include the results of
operations subsequent to the acquisition date.

6.     Sale of
Business

On January 10, 2001, the Company completed
the sale of its wholly owned subsidiary, Federal News Service
Inc. (FNS), for net cash proceeds of $3,853. There
was no gain or loss recorded as a result of this transaction.

On April 6, 2001, the Company sold its
common stock in Sportsline.com, Inc. for $12,500 in cash
consideration. There was no gain or loss recorded as a result of
this transaction.

7.     Property and
Equipment

Property and equipment consisted of the following
at December 31:

|                                     |                               |             |               |      |  |      |         |         |   |   |        |         |  
|------------------------------------ | ----------------------------- | ----------- | ------------- | ---- |  | ---- | ------- | ------- | - | - | ------ | ------- | -
|                                     |                               | Useful Life |               | 2001 |  | 2000
|                                     |                               |             |               |      |  |     
|Computer and communication equipment |                               |             | 35 years     |      |  | $    | 63,080  |         |   | $ | 59,786 |        
|Leasehold improvements               |                               |             | Life of lease |      |  |      | 17,428  |         |   |   | 15,095 |        
|Furniture and fixtures               |                               |             | 38 years     |      |  |      | 16,084  |         |   |   | 15,237 |        
|Capitalized software                 |                               |             | 35 years     |      |  |      | 9,393   |         |   |   | 2,177  |        
|                                     |                               |             |               |      |  |      |         |         |   |   |        |        
|                                     |                               |             |               |      |  |      | 105,985 |         |   |   | 92,295 |        
|                                     | Less accumulated depreciation |             |               |      |  |      |         | (67,554 | ) |   |        | (55,107 | )
|                                     |                               |             |               |      |  |      |         |         |   |   |        |        
|                                     |                               |             |               |      |  | $    | 38,431  |         |   | $ | 37,188 |        
|                                     |                               |             |               |      |  |      |         |         |   |   |        |        

Depreciation expense was $13,139, $12,671 and
$6,681 for the years ended December 31, 2001, 2000 and
1999, respectively.

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

8.     Intangible
Assets

Intangible assets consist of the following at
December 31:

|                              |  |             |               |      |  |      |          |   |  |   |          |  
|----------------------------- |  | ----------- | ------------- | ---- |  | ---- | -------- | - |  | - | -------- | -
|                              |  | Useful Life |               | 2001 |  | 2000
|                              |  |             |               |      |  |     
|Non-compete agreements        |  |             | 23 1/2 years |      |  | $    | 87,898   |   |  | $ | 87,898   |  
|Securities database           |  |             | 35 years     |      |  |      | 10,792   |   |  |   | 10,792   |  
|Computer software             |  |             | 7 years       |      |  |      | 42,486   |   |  |   | 42,976   |  
|Workforce                     |  |             | 9 years       |      |  |      | 9,382    |   |  |   | 9,382    |  
|Customer lists                |  |             | 214 years    |      |  |      | 140,500  |   |  |   | 140,500  |  
|                              |  |             |               |      |  |      |          |   |  |   |          |  
|                              |  |             |               |      |  |      | 291,058  |   |  |   | 291,548  |  
|Less accumulated amortization |  |             |               |      |  |      | (170,018 | ) |  |   | (132,033 | )
|                              |  |             |               |      |  |      |          |   |  |   |          |  
|                              |  |             |               |      |  | $    | 121,040  |   |  | $ | 159,515  |  
|                              |  |             |               |      |  |      |          |   |  |   |          |  

9.     Accrued
Liabilities

Accrued expenses consist of the following at
December 31:

|                                        |  |      |        |      |  |   |        | 
|--------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                                        |  | 2001 |        | 2000
|                                        |  |      |        |     
|Bonus                                   |  | $    | 7,684  |      |  | $ | 6,537  | 
|Payroll taxes                           |  |      | 725    |      |  |   | 550    | 
|Employee related costs                  |  |      | 17,232 |      |  |   | 10,935 | 
|Commissions                             |  |      | 3,026  |      |  |   | 2,763  | 
|Professional services                   |  |      | 2,197  |      |  |   | 3,746  | 
|Acquisition costs                       |  |      | 2,929  |      |  |   | 5,334  | 
|Data center costs                       |  |      | 1,605  |      |  |   | 2,368  | 
|Property costs                          |  |      | 502    |      |  |   | 2,047  | 
|Travel costs                            |  |      | 254    |      |  |   | 447    | 
|Royalties                               |  |      | 3,334  |      |  |   | 1,673  | 
|Sales taxes                             |  |      | 2,080  |      |  |   | 1,871  | 
|Data charges                            |  |      | 4,396  |      |  |   | 4,792  | 
|Franchise/property taxes                |  |      | 952    |      |  |   | 540    | 
|Other discontinued operations (Note 13) |  |      | 867    |      |  |   | 2,208  | 
|Other                                   |  |      | 2,901  |      |  |   | 2,507  | 
|                                        |  |      |        |      |  |   |        | 
|                                        |  | $    | 50,684 |      |  | $ | 48,318 | 
|                                        |  |      |        |      |  |   |        | 

10.     Credit
Arrangements

At December 31, 2000, the Company had an
outstanding letter of credit in the amount of $1,500. This
letter of credit was established in connection with the
settlement of a class action lawsuit against Check Rite of
California, a discontinued operation of the Company. In 2001,
final settlement was made and the letter of credit was
cancelled. The settlement did not have a material effect on the
Companys financial condition or results of operations.

In 2001, the Company entered into an unsecured
credit facility for $10,000, with KeyBank National Association.
During 2001, there were no borrowings associated with this
credit facility and at December 31, 2001, there was no
outstanding balance.

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The credit facility consists of a $10,000 line of
credit that matures on May 1, 2002. Borrowings under this
agreement bear interest at Prime or LIBOR plus 2%, at the
Companys discretion.

The Company entered into the short-term line of
credit to ensure financial flexibility with respect to potential
acquisitions. To date, all acquisitions have been funded out of
the Companys operating funds. The Company does not expect
to utilize this credit facility prior to its expiration date;
however, it does expect to renew the facility.

11.     Stock Based
Compensation

In 2000, the Company adopted the 2000 Long Term
Incentive Plan (the 2000 Plan). Under the 2000 Plan,
the compensation committee of the board of directors can grant
stock-based awards representing up to 20% of the total number of
shares of common stock outstanding at the date of grant. The
2000 Plan provides for the discretionary issuance of stock-based
awards to directors, officers, and employees of the Company, as
well as persons who provide consulting or other services to the
Company. The exercise price of options granted employees under
the 2000 Plan is determined in the discretion of the
Compensation Committee and for 2001 has been equal to the market
price at the date of grant. Options expire ten years from the
date of grant and generally vest over a three to four year
period.

Stock option activity for the years ended
December 31, 2001 and 2000 are as follows:

|                                                     |           |        |       |                |   |   |      |      | 
|---------------------------------------------------- | --------- | ------ | ----- | -------------- | - | - | ---- | ---- | 
|                                                     |           |        |       | Weighted      
|                                                     |           |        |       | Average       
|                                                     |           | Shares |       | Exercise Price
|                                                     |           |        |       |               
|Options arising from the reverse merger
	acquisition |           |        | 3,010 |                |   | $ | 5.32 |     
|                                                     | Granted   |        |       | 950            |   |   |      | 4.46 | 
|                                                     | Exercised |        |       | (192           | ) |   |      | 2.12 | 
|                                                     | Canceled  |        |       | (102           | ) |   |      | 5.64 | 
|                                                     |           |        |       |                |   |   |      |     
|Outstanding, December 31, 2000                       |           |        | 3,666 |                |   |   | 5.91 |     
|                                                     | Granted   |        |       | 5,273          |   |   |      | 8.73 | 
|                                                     | Exercised |        |       | (1,043         | ) |   |      | 5.84 | 
|                                                     | Canceled  |        |       | (207           | ) |   |      | 7.51 | 
|                                                     |           |        |       |                |   |   |      |     
|Outstanding, December 31, 2001                       |           |        | 7,689 |                |   | $ | 7.82 |     
|                                                     |           |        |       |                |   |   |      |     
|Exercisable, December 31, 2001                       |           |        | 2,378 |                |   | $ | 6.51 |     
|                                                     |           |        |       |                |   |   |      |     

The following table summarizes information about
stock options outstanding and exercisable at December 31,
2001.

Range of option exercise prices:

|                                         |  |             |       |             |  |        |       |          |  |  |       |  |  |   |       | 
|---------------------------------------- |  | ----------- | ----- | ----------- |  | ------ | ----- | -------- |  |  | ----- |  |  | - | ----- | 
|                                         |  |             |       |            
|                                         |  | Outstanding |       | Exercisable
|                                         |  |             |       |            
|                                         |  |             |       | Weighted    |  |        |       | Weighted
|                                         |  |             |       | Average     |  |        |       | Average 
|                                         |  |             |       | Exercise    |  |        |       | Exercise
|                                         |  | Shares      |       | Price       |  | Shares |       | Price   
|                                         |  |             |       |             |  |        |       |         
|$1.22 to $2.88 (Avg. life: 1.32 years)   |  |             | 153   |             |  | $      | 2.45  |          |  |  | 150   |  |  | $ | 2.44  | 
|$3.00 to $5.31 (Avg. life: 6.12 years)   |  |             | 1,334 |             |  |        | 4.56  |          |  |  | 868   |  |  |   | 4.69  | 
|$5.54 to $9.34 (Avg. life: 8.55 years)   |  |             | 6,127 |             |  |        | 8.58  |          |  |  | 1,317 |  |  |   | 7.93  | 
|$10.25 to $18.50 (Avg. life: 7.29 years) |  |             | 75    |             |  |        | 14.23 |          |  |  | 43    |  |  |   | 14.66 | 
|                                         |  |             |       |             |  |        |       |          |  |  |       |  |  |   |       | 
|                                         |  |             | 7,689 |             |  |        |       |          |  |  | 2,378 |  |  |   |       | 
|                                         |  |             |       |             |  |        |       |          |  |  |       |  |  |   |       | 

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

As discussed in Note 1, the Company applies
APB Opinion No. 25 in accounting for stock based
compensation and, accordingly, no compensation cost has been
recognized for its stock options in the consolidated financial
statements. The weighted average fair value per share of options
granted was $5.93 for the year ended December 31, 2001.

The following pro forma information presents the
Companys net income (loss) and basic and diluted loss per
share for the years ended December 31, 2001 and 2000 as if
compensation cost had been measured under the fair value method
of SFAS No. 123.

|                                              |  |      |       |      |  |   |          |  
|--------------------------------------------- |  | ---- | ----- | ---- |  | - | -------- | -
|                                              |  | 2001 |       | 2000
|                                              |  |      |       |     
|Net income (loss)                             |  | $    | 1,340 |      |  | $ | (144,366 | )
|Basic and diluted net income (loss) per share |  | $    | 0.01  |      |  | $ | (1.69    | )

The fair value of these options was estimated as
of the date of grant using a Black-Scholes option pricing model
with the following assumptions:

|                         |  |      |      |      |  |  |      |  
|------------------------ |  | ---- | ---- | ---- |  |  | ---- | -
|                         |  | 2001 |      | 2000
|                         |  |      |      |     
|Risk free interest rate  |  |      | 4.25 | %    |  |  | 6.00 | %
|Expected life (in years) |  |      | 4.00 |      |  |  | 4.06 |  
|Volatility               |  |      | 90   | %    |  |  | 109  | %
|Expected dividend yield  |  |      | 0    | %    |  |  | 0    | %

The effects of applying SFAS 123 in this pro
forma disclosure are not indicative of future amounts.
Additional awards in future years are anticipated.

12.     Stockholders
Equity

In addition to the Companys common stock,
the Company may issue up to 5,000 preferred shares, at $0.01 par
value, with terms determined by the board of directors, without
any further action by the stockholders of the Company. At
December 31, 2001, no such stock has been issued.

13.     Discontinued
Operations

As of December 31, 2001, the Company had
$867 of accrued expenses associated with the discontinued
operations of Check Rite International that was a division of
Data Broadcasting Corporation whose operations were discontinued
in 1997. These costs pertain to expected settlements associated
with ongoing litigation.

14.     Commitments
and Contingencies

The Company has obligations under non-cancelable
operating leases for real estate, equipment and distribution
agreements for satellite and cable space and FM radio channels.
Certain of the leases include renewal options and escalation
clauses. Real estate leases are for the Companys corporate
headquarters, sales

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

offices, and data centers. Approximate annual
future commitments under non-cancelable operating leases with
lease terms in excess of one year are as follows:

|                             |  |               |        |              |  |   |       | 
|---------------------------- |  | ------------- | ------ | ------------ |  | - | ----- | 
|                             |  | Real Estate   |        | Distribution
|                             |  | and Equipment |        | Agreements  
|                             |  |               |        |             
|2002                         |  | $             | 10,305 |              |  | $ | 1,073 | 
|2003                         |  |               | 8,966  |              |  |   | 667   | 
|2004                         |  |               | 8,188  |              |  |   | 379   | 
|2005                         |  |               | 7,677  |              |  |   | 267   | 
|2006                         |  |               | 6,733  |              |  |   | 267   | 
|Thereafter                   |  |               | 29,572 |              |  |   |      | 
|                             |  |               |        |              |  |   |       | 
|Total minimum lease payments |  | $             | 71,441 |              |  | $ | 2,653 | 
|                             |  |               |        |              |  |   |       | 

Rental expense was $9,476, $11,677, and $7,448
for the years ended December 31, 2001, 2000 and 1999,
respectively.

Derivative Action Early in 2001, seven lawsuits were
filed by various stockholders of the Company against the
Companys directors and the Companys majority
stockholder. These actions have been consolidated in the
Delaware Chancery Court for New Castle County under the caption
In re Data Broadcasting Corporation Derivative Litigation:
Consolidated Civil Action No. 18665-NC(the
Derivative Action). As is usual in derivative
actions, the Company is named as a nominal defendant in the
Derivative Action on the theory that the plaintiff stockholders
are allegedly suing on its behalf and for its benefit.

The Derivative Action challenges the
Companys January 2001 sale of its 34.4% interest in
MarketWatch to Pearson, the parent company of the Companys
majority stockholder, as having been consummated at an allegedly
inadequate price due to the supposedly undue influence of
Pearson as the Companys majority stockholder. Plaintiffs
seek to have Pearson and the Companys directors
account to the Company for damages that the Company
allegedly sustained by reason of an unduly low sale price.

The Companys directors have answered the
consolidated complaint, and discovery has just commenced. The
Company expects to contest the allegations against it and its
directors vigorously.

Heartland Litigation On January 14, 2002, two
stockholders (the Nagels) of two municipal bond
mutual funds (the Heartland High Yield Funds)
sponsored by The Heartland Group, Inc. filed suit against those
funds, their corporate sponsors, their advisors, and their
independent auditors. The complaint, which is pending in Federal
court in the Eastern District of Wisconsin under the caption
Robert L. Nagel, et al. v. The Heartland Group, Inc., et al.
(E.D. Wis. Civil Action No. 01-C-1004), closely tracks
a consolidated class action complaint that reflects the fraud,
misrepresentation, and negligence claims of 21 individual
stockholders against the same defendants. Unlike the
consolidated class action complaint, however, the Nagels have
also named the Company as an additional defendant in their
separate action. The claim against the Company is that it
allegedly was negligent, in an unspecified way, in its provision
of securities prices to the Heartland High Yield Funds and that
its negligence allegedly contributed to a sharp drop, in October
2000, of the net asset values of those funds. The Company
intends to contest the viability of being named as an additional
defendant without any particularization of its alleged
misconduct. If the Company is deemed to have been properly named
a defendant in the separate Nagel action, it expects to contest
the allegations against it vigorously.

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

15.     Income
Taxes

The components of income (loss) before
income taxes are as follows for the years ended December 31:

|         |  |      |        |      |  |      |          |   |  |   |        | 
|-------- |  | ---- | ------ | ---- |  | ---- | -------- | - |  | - | ------ | 
|         |  | 2001 |        | 2000 |  | 1999
|         |  |      |        |      |  |     
|Domestic |  | $    | 14,672 |      |  | $    | (222,107 | ) |  | $ | 7,836  | 
|Foreign  |  |      | 13,863 |      |  |      | 11,113   |   |  |   | 10,009 | 
|         |  |      |        |      |  |      |          |   |  |   |        | 
|Total    |  | $    | 28,535 |      |  | $    | (210,994 | ) |  | $ | 17,845 | 
|         |  |      |        |      |  |      |          |   |  |   |        | 

Income tax expense (benefits) consists of
the following for the years ended December 31:

|          |         |      |        |        |   |      |         |         |   |   |        |        |  
|--------- | ------- | ---- | ------ | ------ | - | ---- | ------- | ------- | - | - | ------ | ------ | -
|          |         | 2001 |        | 2000   |   | 1999
|          |         |      |        |        |   |     
|Current:  |         |      |        |        |   |      |         |         |   |   |        |       
|          | Federal |      | $      | 21,369 |   |      | $       | 6,292   |   |   | $      | 10,652 |  
|          | State   |      |        | 5,780  |   |      |         | 3,740   |   |   |        | 2,074  |  
|          | Foreign |      |        | 5,874  |   |      |         | 6,705   |   |   |        | 5,076  |  
|          |         |      |        |        |   |      |         |         |   |   |        |       
|          |         |      | 33,023 |        |   |      | 16,737  |         |   |   | 17,802 |       
|          |         |      |        |        |   |      |         |         |   |   |        |       
|Deferred: |         |      |        |        |   |      |         |         |   |   |        |       
|          | Federal |      |        | (7,600 | ) |      |         | (71,391 | ) |   |        | (5,146 | )
|          | State   |      |        | (765   | ) |      |         | (11,940 | ) |   |        | (629   | )
|          | Foreign |      |        | (435   | ) |      |         | (928    | ) |   |        | (379   | )
|          |         |      |        |        |   |      |         |         |   |   |        |       
|          |         |      | (8,800 | )      |   |      | (84,259 | )       |   |   | (6,154 | )     
|          |         |      |        |        |   |      |         |         |   |   |        |       
|          |         | $    | 24,223 |        |   | $    | (67,522 | )       |   | $ | 11,648 |       
|          |         |      |        |        |   |      |         |         |   |   |        |       

Deferred taxes are recorded for differences
between the financial statement and tax basis of assets and
liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse. The components of
the Companys deferred income taxes recognized in the
financial statements are as follows at December 31:

|                              |  |      |        |      |  |   |        |  
|----------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                              |  | 2001 |        | 2000
|                              |  |      |        |     
|Current deferred tax:         |  |      |        |      |  |   |        |  
|Accrued expenses              |  | $    | 6,978  |      |  | $ | 7,307  |  
|Depreciation                  |  |      | 1,913  |      |  |   | 1,477  |  
|Other                         |  |      | 3,079  |      |  |   | 1,040  |  
|Sale of Business              |  |      |       |      |  |   | (744   | )
|Accounts Receivable Allowance |  |      | 1,237  |      |  |   | 2,218  |  
|Write off of Investments      |  |      |       |      |  |   | 1,451  |  
|                              |  |      |        |      |  |   |        |  
|                              |  |      | 13,207 |      |  |   | 12,749 |  

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                 |  |      |         |      |  |   |         |  
|-------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                 |  | 2001 |         | 2000
|                                 |  |      |         |     
|Long term deferred tax:          |  |      |         |      |  |   |         |  
|Other intangible assets          |  |      | 5,378   |      |  |   | 5,715   |  
|Non compete agreements           |  |      | 24,302  |      |  |   | 22,207  |  
|Net operating loss carryforwards |  |      | 4,191   |      |  |   | 7,962   |  
|Customer Lists                   |  |      | (42,080 | )    |  |   | (49,309 | )
|Sale of business                 |  |      | 6,477   |      |  |   | 6,477   |  
|                                 |  |      |         |      |  |   |         |  
|                                 |  |      | (1,732  | )    |  |   | (6,948  | )
|Valuation allowance              |  |      | (6,477  | )    |  |   | (6,477  | )
|                                 |  |      |         |      |  |   |         |  
|                                 |  |      | (8,209  | )    |  |   | (13,425 | )
|                                 |  |      |         |      |  |   |         |  
|Total                            |  | $    | 4,998   |      |  | $ | (676    | )

The long term deferred tax asset of $6,477 was
recorded concurrently with the sale of MarketWatch (see
Note 4). The realization of this tax asset is not within
the control of the Company and as such a full valuation
allowance has been provided against this asset. In 2000, as a
result of finalizing certain tax returns of Data Broadcasting
Corporation for periods prior to the Merger, the Company
recorded a deferred tax liability of $3,126. This adjustment
resulted in an increase to goodwill of the same amount. It is
expected that the Companys deferred tax assets will be
realized from future taxable income.

The Company has $11,251 of net operating loss
carryforwards that were obtained in the acquisition of Data
Broadcasting Corporation. The annual usage of these net
operating loss carryforwards is limited by IRS regulations and
certain state regulations. The Company believes that based upon
its forecasts, these net operating loss carryforwards will be
fully utilized.

Income taxes computed using the federal statutory
income tax rate differ from the Companys effective tax
rate primarily due to the following:

|                                                  |  |                          |      |      |  |      |       |    |  |  |      |  
|------------------------------------------------- |  | ------------------------ | ---- | ---- |  | ---- | ----- | -- |  |  | ---- | -
|                                                  |  |                         
|                                                  |  | Years Ended December 31,
|                                                  |  |                         
|                                                  |  | 2001                     |      | 2000 |  | 1999
|                                                  |  |                          |      |      |  |     
|Statutory U.S. federal tax rate                   |  |                          | 35.0 | %    |  |      | (35.0 | )% |  |  | 35.0 | %
|State taxes, net of federal tax benefit           |  |                          | 5.0  |      |  |      | 1.1   |    |  |  | 9.1  |  
|Foreign income taxed at different statutory rates |  |                          | 6.0  |      |  |      | 1.0   |    |  |  | 9.2  |  
|Basis difference in sale of MarketWatch.com, Inc. |  |                          |     |      |  |      | (3.1  | )  |  |  |     |  
|Nondeductible goodwill                            |  |                          | 38.0 |      |  |      | 4.0   |    |  |  | 16.0 |  
|Other, net                                        |  |                          | 1.0  |      |  |      |      |    |  |  | (4.0 | )
|                                                  |  |                          |      |      |  |      |       |    |  |  |      |  
|Effective tax rate                                |  |                          | 85.0 | %    |  |      | (32.0 | )% |  |  | 65.3 | %
|                                                  |  |                          |      |      |  |      |       |    |  |  |      |  

16.     Retirement
Plans

Pearson, Inc.
Savings and Investment Plan

The Companys U.S. employees are eligible to
participate in a Pearson subsidiarys U.S. 401(k) Plan (the
401(k) Plan). The 401(k) Plan allows all employees
to make contributions of a specified percentage of their
compensation, which is subject to a 50% employer match. The
401(k) Plan additionally allows employees to contribute amounts
above the specified percentage, which are not subject to any
employer match. Contributions made by the Company for the 401(k)
plan are determined as a percentage of covered salary and
amounted to $1,590, $1,633, and $806 for the years ended
December 31, 2001, 2000 and 1999, respectively.

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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Pearson, Inc.
Pension Plan

Pearson Inc., a Pearson U.S. subsidiary, sponsors
a defined benefit plan (the Plan) for Pearsons
U.S. employees and the Plan also includes substantially all of
the Companys U.S. employees. Pension costs are actuarially
determined. The Company funds pension costs attributable to its
employees to the extent allowable under IRS regulations. In
2001, the Company froze the benefits associated with this
pension plan. There was no gain or loss recorded as a result of
the curtailment.

Presented below is certain financial information
relating to the Companys participation in the Plan:

|                                                 |  |                         |       |      |  |   |        |  
|------------------------------------------------ |  | ----------------------- | ----- | ---- |  | - | ------ | -
|                                                 |  |                        
|                                                 |  | Year Ended December 31,
|                                                 |  |                        
|Change in benefit obligation:                    |  | 2001                    |       | 2000
|                                                 |  |                         |       |     
|Benefit obligation at beginning of year          |  | $                       | 5,079 |      |  | $ | 3,737  |  
|Service cost                                     |  |                         | 2,108 |      |  |   | 1,479  |  
|Interest cost                                    |  |                         | 415   |      |  |   | 272    |  
|Amendments                                       |  |                         | (7    | )    |  |   |       |  
|Curtailment                                      |  |                         | (899  | )    |  |   |       |  
|Actuarial loss (gain)                            |  |                         | (282  | )    |  |   | 8      |  
|Benefits paid                                    |  |                         | (439  | )    |  |   | (417   | )
|                                                 |  |                         |       |      |  |   |        |  
|                                                 |  | $                       | 5,975 |      |  | $ | 5,079  |  
|                                                 |  |                         |       |      |  |   |        |  
|Change in plan assets:                           |  |                         |       |      |  |   |        |  
|Fair value of plan assets at beginning of period |  | $                       | 1,865 |      |  | $ | 1,173  |  
|Actual return on plan assets                     |  |                         | (243  | )    |  |   | 121    |  
|Employer contribution                            |  |                         | 1,491 |      |  |   | 988    |  
|Benefits paid                                    |  |                         | (439  | )    |  |   | (417   | )
|                                                 |  |                         |       |      |  |   |        |  
|Fair value of plan assets at end of period       |  | $                       | 2,674 |      |  | $ | 1,865  |  
|                                                 |  |                         |       |      |  |   |        |  
|Reconciliation of funded status:                 |  |                         |       |      |  |   |        |  
|Benefit obligation at end of year                |  | $                       | 5,975 |      |  | $ | 5,079  |  
|Fair value of plan assets at end of period       |  |                         | 2,674 |      |  |   | 1,865  |  
|                                                 |  |                         |       |      |  |   |        |  
|Funded status at end of period                   |  |                         | 3,301 |      |  |   | 3,214  |  
|Unrecognized prior service cost                  |  |                         | 8     |      |  |   | 316    |  
|Unrecognized net actuarial loss                  |  |                         | (239  | )    |  |   | (1,017 | )
|                                                 |  |                         |       |      |  |   |        |  
|Accrued pension cost                             |  | $                       | 3,070 |      |  | $ | 2,513  |  
|                                                 |  |                         |       |      |  |   |        |  
|Weighted average assumptions:                    |  |                         |       |      |  |   |        |  
|Discount rate                                    |  |                         | 7.25  | %    |  |   | 8.00   | %
|Expected return on plan assets                   |  |                         | 9.00  | %    |  |   | 9.00   | %
|Rate of compensation increase                    |  |                         | 4.50  | %    |  |   | 4.50   | %

41



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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                          |  |                         |       |      |  |      |       |   |  |   |       |  
|----------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|                                          |  |                        
|                                          |  | Year Ended December 31,
|                                          |  |                        
|                                          |  | 2001                    |       | 2000 |  | 1999
|                                          |  |                         |       |      |  |     
|Components of net periodic benefit
	cost: |  |                         |       |      |  |      |       |   |  |   |       |  
|Service cost                              |  | $                       | 2,108 |      |  | $    | 1,479 |   |  | $ | 1,077 |  
|Interest cost                             |  |                         | 415   |      |  |      | 272   |   |  |   | 204   |  
|Expected return on plan assets            |  |                         | (160  | )    |  |      | (75   | ) |  |   | (81   | )
|Amortization of prior service costs       |  |                         | (24   | )    |  |      | (24   | ) |  |   | (24   | )
|                                          |  |                         |       |      |  |      |       |   |  |   |       |  
|Net periodic benefit cost                 |  | $                       | 2,339 |      |  | $    | 1,652 |   |  | $ | 1,176 |  
|                                          |  |                         |       |      |  |      |       |   |  |   |       |  

Foreign
Pension Plans

Pearson and its subsidiaries maintain certain
pension plans for which certain non-U.S. employees of the
Company are eligible to participate. Information relating to the
Companys portion of the actuarial value of plan benefits,
asset values, and other pension disclosures pertaining to these
other Pearson plans are not separately determinable. Pension
expense incurred by the Company related to these plans for the
years ended December 31, 2001 and 2000 was $1,870 and
$1,745, respectively. No pension expense was incurred by the
Company related to these plans in 1999 due to their overfunded
position in 1999.

Certain of the Companys employees
participate in Pearson equity based employee benefit plans. For
the years ended December 31, 2001 and 2000, the Company
recorded costs of $797 and $343, respectively, related to the
participation in these plans. In 1999, there was no cost
associated with these plans.

17.     Related Party
Transactions

The Company and Pearson are parties to a
management services agreement that renews annually. This
agreement governs the provision of services described below
effective as of February 29, 2000.

Pursuant to the agreement, Pearson provides
certain services to the Company and the Company provides certain
services to Pearson. The services provided by Pearson to the
Company afford the Company administrative convenience and the
Company believes they are more favorable to it than if it had
negotiated similar arrangements with non-affiliated third
parties. The services include administering the 401(k) and
employee health benefit plans, insurance, billing, accounts
payable, accounts receivable, computer and accounting system
support, financial accounting, tax and payroll services related
to certain subsidiaries of the Company, primarily in England.
The services provided by the Company to Pearson include
editorial, information technology and property services. A
majority of the charges to and from Pearson and its affiliates
are at cost. Certain of the Companys directors are
employees of Pearson. The independent committee of the
Companys board of directors, which consists of three
directors, none of whom are employees of Pearson, approved this
agreement on behalf of the Company. There was no material effect
on the financial condition or results of operations of the
Company associated with the signing of this agreement. If
Pearsons services to the Company were to be terminated the
Company would be required to seek equivalent services in the
open market, at potentially increased costs. In addition, the
Company would lose the efficiencies of working in concert with
Pearson, and would bear the entire burden of administrating such
services, resulting in an increased demand on the Companys
administrative resources.

In 2001, Pearsons Financial Times Group
entered into a trademark license agreement with the Company
authorizing the Company to use the FT and
Financial Times trademarks and logos in the
Companys business. The license grants the Company the
right to use the FT and Financial Times brands for a five-year
period for one British Pound with an automatic renewal
thereafter, unless terminated. The license is subject to quality
control standards, restrictions on sublicensing the trademarks
to third parties and certain other restrictions. The independent
committee of the Companys board of directors approved the
agreement on behalf of the Company.

On March 26, 2001, the Company purchased used
equipment in the form of servers for an aggregate of $97 from
FT.com, a wholly owned subsidiary of Pearson. The purchase price
was at or better than discounts

42



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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

offered elsewhere for comparable equipment and
the purchase was approved by the independent committee of the
board of directors on behalf of the Company.

Any amounts payable or receivable due to and from
Pearson are classified as an affiliate transaction on the
balance sheet. For the years ended December 31, 2001, 2000
and 1999, the Company incurred net (income)/ expense of $1,749,
($3,508), and $588 for these services provided to Pearson and
received from Pearson. In 2000, the Company had an arrangement
with a Pearson affiliate, Financial Times Electronic Publishing
(FTEP), for the use of certain production equipment.
In 2000, the Company invoiced FTEP $4,465 for this service. The
Company recorded this transaction as a reduction to costs. This
service was not in effect for the years ended December 31,
1999 and 2001.

18.     Segment
Information

The Companys reportable segments are as
follows:



|                         |  |                                                                                                                                                                                                                                                                                  
|------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Institutional Services   |  | delivery of time sensitive pricing, dividend,
	corporate action, hard -to- value unlisted fixed income
	instruments, and descriptive information for more than
	3.5 million securities traded around the world, and fixed
	income portfolio analytics to institutional customers.
|                        
|Retail Investor Services |  | delivery of real-time financial market
	information to retail customers.                                                                                                                                                                                                         

The Company evaluates its segments on the basis
of revenue, operating income and earnings before interest,
taxes, depreciation and amortization, and equity in the loss of
MarketWatch (EBITDA) and capital expenditures.
EBITDA is defined as net income before net interest
expense/income, income taxes, depreciation and amortization
expense and equity in losses of MarketWatch. EBITDA is presented
because management believes it is a widely accepted indicator of
funds generated by the business, although it is not a measure of
liquidity or financial performance under generally accepted
accounting principles. The Company believes that EBITDA, while
providing useful information, should not be considered in
isolation or as an alternative to net income or cash flows as
determined under generally accepted accounting principles.
EBITDA, as presented here, may differ from similarly titled
measures reported by other companies due to potential
inconsistencies in methods of calculation.

|                              |                               |           |       |         |        |         |   |         |        |         |   |         |   |         | 
|----------------------------- | ----------------------------- | --------- | ----- | ------- | ------ | ------- | - | ------- | ------ | ------- | - | ------- | - | ------- | 
|                              |                               | 2001      |       | 2000    |        | 1999   
|                              |                               |           |       |         |        |        
|Revenues                      |                               |           |       |         |        |         |   |         |        |         |   |        
|                              | Institutional                 |           | $     | 294,440 |        |         | $ | 269,943 |        |         | $ | 188,956 |  
|                              | Retail                        |           |       |         |        |         |   |         |        |         |   |         |  
|                              |                               | eSignal   |       |         | 35,392 |         |   |         | 27,427 |         |   |         |  |        
|                              |                               | Broadcast |       |         | 10,170 |         |   |         | 16,768 |         |   |         |  |        
|                              |                               |           |       |         |        |         |   |         |        |         |   |        
|                              |                               |           | Total |         | $      | 340,002 |   |         | $      | 314,138 |   |         | $ | 188,956 | 
|                              |                               |           |       |         |        |         |   |         |        |         |   |        
|Income (loss) from operations |                               |           |       |         |        |         |   |         |        |         |   |        
|                              | Institutional                 |           | $     | 120,413 |        |         | $ | 97,032  |        |         | $ | 53,994  |  
|                              | Retail                        |           |       | (6,345  | )      |         |   | (8,205  | )      |         |   |        |  
|                              | Corporate and unallocated (1) |           |       | (88,415 | )      |         |   | (91,918 | )      |         |   | (36,390 | )
|                              |                               |           |       |         |        |         |   |         |        |         |   |        
|                              |                               |           | Total |         | $      | 25,653  |   |         | $      | (3,091  | ) |         | $ | 17,604  | 
|                              |                               |           |       |         |        |         |   |         |        |         |   |        
|Identifiable assets           |                               |           |       |         |        |         |   |         |        |         |   |        
|                              | Institutional                 |           | $     | 441,900 |        |         | $ | 457,838 |        |         | $ | 452,072 |  
|                              | Retail                        |           |       | 13,567  |        |         |   | 36,087  |        |         |   |        |  
|                              | Corporate and unallocated     |           |       | 242,516 |        |         |   | 248,165 |        |         |   |        |  
|                              |                               |           |       |         |        |         |   |         |        |         |   |        
|                              |                               |           | Total |         | $      | 697,983 |   |         | $      | 742,090 |   |         | $ | 452,702 | 
|                              |                               |           |       |         |        |         |   |         |        |         |   |        



---



|    |                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Corporate and unallocated loss from operations
	primarily consists of goodwill and intangible amortization.
	Because the Companys chief operating decision maker does
	not use this information as a measure of each segments
	profit or loss, it has not been allocated to the segments.

43



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##### Table of Contents



INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The Companys geographic distribution is as
follows:

|                    |                           |       |       |         |         |         |   |         |         |         |   |         |         |         | 
|------------------- | ------------------------- | ----- | ----- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                    |                           | 2001  |       | 2000    |         | 1999   
|                    |                           |       |       |         |         |        
|Revenues            |                           |       |       |         |         |         |   |         |         |         |   |        
|                    | United States             |       | $     | 268,094 |         |         | $ | 242,000 |         |         | $ | 127,366 |        
|                    | Foreign                   |       |       | 71,908  |         |         |   | 72,138  |         |         |   | 61,590  |        
|                    |                           |       |       |         |         |         |   |         |         |         |   |        
|                    |                           | Total |       | $       | 340,002 |         |   | $       | 314,138 |         |   | $       | 188,956 |        
|                    |                           |       |       |         |         |         |   |         |         |         |   |        
|Identifiable assets |                           |       |       |         |         |         |   |         |         |         |   |        
|                    | United States             |       | $     | 587,745 |         |         | $ | 635,193 |         |         | $ | 329,966 |        
|                    | Foreign                   |       |       | 110,238 |         |         |   | 106,897 |         |         |   | 122,736 |        
|                    |                           |       |       |         |         |         |   |         |         |         |   |        
|                    |                           |       | Total |         | $       | 697,983 |   |         | $       | 742,090 |   |         | $       | 452,702 | 
|                    |                           |       |       |         |         |         |   |         |         |         |   |        
|EBITDA              |                           |       |       |         |         |         |   |         |         |         |   |        
|                    | Institutional             |       | $     | 120,241 |         |         | $ | 97,973  |         |         | $ | 60,675  |        
|                    | Retail                    |       |       | 6,966   |         |         |   | 3,675   |         |         |   |        |        
|                    | Corporate and unallocated |       |       | (12,889 | )       |         |   | (9,125  | )       |         |   | (4,493  | )      
|                    |                           |       |       |         |         |         |   |         |         |         |   |        
|                    |                           |       | Total |         | $       | 114,318 |   |         | $       | 92,523  |   |         | $       | 56,182  | 
|                    |                           |       |       |         |         |         |   |         |         |         |   |        

19.     Subsequent
Events

On January 31, 2002, FT Interactive
Data acquired the Securities Pricing Service from Merrill Lynch
for $48,000 in cash. Additionally, FT Interactive Data and
Merrill Lynch entered into a multi-year agreement where
FT Interactive Data will provide services to Merrill Lynch.

44



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##### Table of Contents



INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES

QUARTERLY FINANCIAL INFORMATION
(UNAUDITED)

(In thousands, except per share
data)


The following table presents selected unaudited
financial information for the eight quarters in the period ended
December 31, 2001. The results for any quarter are not
necessarily indicative of future quarterly results and,
accordingly, period-to-period comparisons should not be relied
upon as an indication of future performance.

In December 1999, the Securities and
Exchange Commission staff released Staff Accounting Bulletin
No. 101, Revenue Recognition in Financial
Statements (SAB No. 101), which provides
guidance on the recognition, presentation and disclosure of
revenue in financial statements. SAB 101 was effective in
the fourth quarter of Fiscal 2000. SAB 101 was adopted in
the fourth quarter of 2000 and had no impact on 2001 results.

The increase in the Companys fourth quarter
tax expense, in 2001, was due to a shift in income from the
Companys UK business to the Companys US business
where the Companys effective tax rate is higher, as well
as a settlement of certain prior year tax matters.

|                                               |  |                |        |              |  |              |        |             |  |      |        |  |  |   |        |   |  |   |         | 
|---------------------------------------------- |  | -------------- | ------ | ------------ |  | ------------ | ------ | ----------- |  | ---- | ------ |  |  | - | ------ | - |  | - | ------- | 
|                                               |  |                |        |             
|                                               |  | Quarters Ended |        | Year Ended  
|                                               |  |                |        | December 31,
|                                               |  | March 31       |        | June 30      |  | September 30 |        | December 31 |  | 2001
|                                               |  |                |        |              |  |              |        |             |  |     
|Revenue                                        |  | $              | 83,775 |              |  | $            | 84,439 |             |  | $    | 85,287 |  |  | $ | 86,501 |   |  | $ | 340,002 | 
|Total costs and expenses                       |  |                | 83,796 |              |  |              | 80,608 |             |  |      | 76,372 |  |  |   | 73,573 |   |  |   | 314,349 | 
|Income (loss) from operations                  |  |                | (21    | )            |  |              | 3,831  |             |  |      | 8,915  |  |  |   | 12,928 |   |  |   | 25,653  | 
|Other income, net                              |  |                | 658    |              |  |              | 791    |             |  |      | 934    |  |  |   | 499    |   |  |   | 2,882   | 
|Provision for income taxes                     |  |                | 480    |              |  |              | 3,267  |             |  |      | 6,011  |  |  |   | 14,465 |   |  |   | 24,223  | 
|Net income (loss)                              |  |                | 157    |              |  |              | 1,355  |             |  |      | 3,838  |  |  |   | (1,038 | ) |  |   | 4,312   | 
|Net income (loss) per share
	Basic and Diluted |  | $              | 0.00   |              |  | $            | 0.01   |             |  | $    | 0.04   |  |  | $ | (0.01  | ) |  | $ | 0.05    | 

|                                                   |  |                |        |              |  |              |         |             |  |      |         |   |  |   |          |   |  |   |          |  
|-------------------------------------------------- |  | -------------- | ------ | ------------ |  | ------------ | ------- | ----------- |  | ---- | ------- | - |  | - | -------- | - |  | - | -------- | -
|                                                   |  |                |        |             
|                                                   |  | Quarters Ended |        | Year Ended  
|                                                   |  |                |        | December 31,
|                                                   |  | March 31       |        | June 30      |  | September 30 |         | December 31 |  | 2000
|                                                   |  |                |        |              |  |              |         |             |  |     
|Revenue prior to adjustment                        |  | $              | 65,404 |              |  | $            | 83,896  |             |  | $    | 85,021  |   |  | $ | 87,567   |   |  | $ | 321,888  |  
|SAB 101 adjustment                                 |  |                | (959   | )            |  |              | (2,748  | )           |  |      | (2,136  | ) |  |   | (1,907   | ) |  |   | (7,750   | )
|Adjusted revenue                                   |  |                | 64,445 |              |  |              | 81,148  |             |  |      | 82,885  |   |  |   | 85,660   |   |  |   | 314,138  |  
|Total costs and expenses prior to adjustment       |  |                | 64,150 |              |  |              | 87,419  |             |  |      | 83,496  |   |  |   | 89,914   |   |  |   | 324,979  |  
|SAB 101 adjustment                                 |  |                | (959   | )            |  |              | (2,748  | )           |  |      | (2,136  | ) |  |   | (1,907   | ) |  |   | (7,750   | )
|Adjusted expenses                                  |  |                | 63,191 |              |  |              | 84,671  |             |  |      | 81,360  |   |  |   | 88,007   |   |  |   | 317,229  |  
|Income (loss) from operations                      |  |                | 1,254  |              |  |              | (3,523  | )           |  |      | 1,525   |   |  |   | (2,347   | ) |  |   | (3,091   | )
|Equity in loss from MarketWatch.com, Inc.          |  |                | (6,382 | )            |  |              | (20,018 | )           |  |      | (19,376 | ) |  |   | (21,453  | ) |  |   | (67,229  | )
|Other than temporary loss in MarketWatch.com, Inc. |  |                |       |              |  |              |        |             |  |      |        |   |  |   | (141,844 | ) |  |   | (141,844 | )
|Other income, net                                  |  |                | 133    |              |  |              | 230     |             |  |      | 228     |   |  |   | 579      |   |  |   | 1,170    |  
|Provision (benefit) for income taxes               |  |                | 227    |              |  |              | (4,478  | )           |  |      | (434    | ) |  |   | (62,837  | ) |  |   | (67,522  | )
|Net loss                                           |  |                | (5,222 | )            |  |              | (18,833 | )           |  |      | (17,189 | ) |  |   | (102,228 | ) |  |   | (143,472 | )
|Net loss per share Basic & Diluted                 |  | $              | (0.08  | )            |  | $            | (0.21   | )           |  | $    | (0.19   | ) |  | $ | (1.12    | ) |  | $ | (1.68    | )

45



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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES

For the Years Ended December 31, 2001,
2000, and 1999

(In thousands)


Schedule VIII Valuation and Qualifying
Accounts

|                                |                              |            |   |           |  |            |   |            |  |           |   |     |      |  |   |       |  |  |   |       | 
|------------------------------- | ---------------------------- | ---------- | - | --------- |  | ---------- | - | ---------- |  | --------- | - | --- | ---- |  | - | ----- |  |  | - | ----- | 
|                                |                              | Balance at |   |           |  | Charged to |   |            |  | Balance  
|                                |                              | Beginning  |   |           |  | Other      |   |            |  | at End of
|Description                     |                              | of Period  |   | Additions |  | Accounts   |   | Write Offs |  | Period   
|                                |                              |            |   |           |  |            |   |            |  |          
|Allowance for doubtful accounts |                              |            |   |           |  |            |   |            |  |           |   |     |      |  |   |       |  |  |   |      
|                                | Year Ended December 31, 2001 |            | $ | 3,819     |  |            | $ | 7,700      |  |           | $ | (16 | )(A) |  | $ | 7,210 |  |  | $ | 4,293 | 
|                                | Year Ended December 31, 2000 |            |   | 4,129     |  |            |   | 4,094      |  |           |   | (63 | )(A) |  |   | 4,341 |  |  |   | 3,819 | 
|                                | Year Ended December 31, 1999 |            |   | 1,556     |  |            |   | 4,318      |  |           |   | (2  | )(A) |  |   | 1,743 |  |  |   | 4,129 | 



---



|    |                                                       
|--- | ------------------------------------------------------
|(A) | Currency translation adjustments for foreign
	entities

46



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##### Table of Contents



INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES

For the Years Ended December 31, 2001,
2000, and 1999

(In thousands)





Item 9.     Changes
In and Disagreements With Accountants on Accounting and
Financial Disclosure

None.




PART III




Item 10.     Directors
and Executive Officers of the Registrant

That portion of the Companys definitive
Proxy Statement appearing under the captions Election of
Directors-Nominees and Section 16(a) Beneficial
Ownership Reporting Compliance to be filed with the
Commission and to be used in connection with its Annual Meeting
of Stockholders expected to be held in May 2002 is hereby
incorporated by reference.

Executive Officers of the Registrant (as of
February 20, 2002)

|                  |  |     |    |                          |  |                                                         
|----------------- |  | --- | -- | ------------------------ |  | --------------------------------------------------------
|Name              |  | Age |    | Office Held with Company
|                  |  |     |    |                         
|Stuart J. Clark   |  |     | 54 |                          |  | President and Chief Executive Officer                   
|Steven G. Crane   |  |     | 45 |                          |  | Executive Vice President and Chief Financial
	Officer   
|Andrea H. Loew    |  |     | 44 |                          |  | Vice President, General Counsel and Corporate
	Secretary
|John L. King      |  |     | 51 |                          |  | Chief Operating Officer of FT Interactive Data          
|Raymond L. DArcy |  |     | 49 |                          |  | President, Data Delivery Products, FT Interactive
	Data 

Stuart J. Clarkhas
served as president and chief executive officer of the Company
and a member of the Companys board of directors since
February 29, 2000, and has been employed in the financial
information industry since 1968. Prior to his current position
with the Company he had been president of Interactive Data
Corporation (as it existed prior to the Merger) since 1995. From
1993 to 1995, Mr. Clark was a director of UK-based
Financial Times Information, with specific responsibility for
the Market Data Division. Prior to 1993, Mr. Clark had led
the Market Data Division of Extel Financial Limited, which was
acquired by Pearson plcs Financial Times Group in December
1993.

Steven G. Cranehas
served as executive vice president and chief financial officer
of the Company since November 30, 1999. From October 1997
through November 30, 1999, Mr. Crane served as vice
president and chief financial officer of Video Services
Corporation, a company listed on the American Stock Exchange.
From 1996 to 1997, Mr. Crane was the owner of ATE, Inc., a
provider of packaging related equipment to international
bottling companies. From 1990 to 1995, Mr. Crane was a
division CFO for Pepsi-Cola International.

Andrea H. Loewhas
served as vice president, general counsel and corporate
secretary of the Company since February 29, 2000. From
September 1996 until February 29, 2000, Ms. Loew
served as vice president, general counsel and corporate
secretary of Interactive Data Corporation (as it existed prior
to the Merger). From 1998 until February 29, 2000,
Ms. Loew served as vice president and general counsel to
Financial Times Asset Management Group. Prior thereto,
Ms. Loew was a partner in Eckert, Seamans, Cherin &
Mellott, LLC.

John L. Kinghas
served as chief operating officer of FT Interactive Data since
April 1999. From 1997 to April 1999, Mr. King served as the
managing director/president of Financial Times Groups
Extel Financial Ltd. Division. Prior thereto, Mr. King
served as vice president, IDSI services for Interactive
Data Corporation (as it existed prior to the Merger).

47



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INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


For the Years Ended December 31, 2001,
2000, and 1999  (Continued)

Raymond L. DArcyhas served as President of Data
Delivery Products for FT Interactive Data since January 2001.
From 1999 to 2001, Mr. DArcy served as Senior Vice
President of Global Sales, Marketing and Customer Support for
Interactive Data Corporation (as it existed prior to the
Merger), and from 1996 to 1999 as Vice President of North
American Sales, Marketing and Customer Support. Prior thereto,
Mr. DArcy served as FT Interactive Datas
Regional Sales Director for Eastern North America for ten years.




Item 11.     Executive
Compensation

That portion of the Companys definitive
Proxy Statement appearing under the caption Executive
Compensation to be filed with the Commission and to be
used in connection with its Annual Meeting of Stockholders
expected to be held in May 2002 is hereby incorporated by
reference.




Item 12.     Security
Ownership of Certain Beneficial Owners and
Management

That portion of the Companys definitive
Proxy Statement appearing under the caption Security
Ownership of Certain Beneficial Owners and Management to
be filed with the Commission and to be used in connection with
its Annual Meeting of Stockholders expected to be held in May
2002 is hereby incorporated by reference.




Item 13.     Certain
Relationships and Related Transactions

That portion of the Companys definitive
Proxy Statement appearing under the caption Related Party
Transactions to be filed with the Commission and to be
used in connection with its Annual Meeting of Stockholders
expected to be held in May 2002 is hereby incorporated by
reference.




PART IV




Item 14.     Exhibits,
Financial Statement Schedules and Reports on
Form 8-K

A.     The following
documents are filed as part of this report:



| |    |                     
| | -- | --------------------
| | 1. | Financial Statements



| |                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | The financial statements and report of
	independent accountants required by this item are included in
	Part II, Item 8. See pages 23 to 44, herein.



| |                                     
| | ------------------------------------
| | 2.     Financial
	Statement Schedule



| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | Schedule VIII, Valuation and Qualifying
	Accounts, is included in Part II, Item 8. See
	page 46, herein.



| |                 
| | ----------------
| | 3.     Exhibits*

48



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##### Table of Contents



INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


For the Years Ended December 31, 2001,
2000, and 1999  (Continued)

The exhibits to this Form 10-K are listed
below.

|        |       |                         |  |                                                                                                                                                                                                                                                                                                     
|------- | ----- | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Exhibits
|        |       |                        
|        | 2.1   |                         |  | Agreement and Plan of Merger, dated as of
	November 14, 1999, among Data Broadcasting Corporation,
	Pearson Longman, Inc., Detective Merger-Sub, Inc. and
	Interactive Data Corporation. (Exhibit 99.5.1 to
	Companys Form 8-K filed on November 22, 1999.)                                        
|        | 2.2   |                         |  | Amendment No. 1 to Agreement and Plan of
	Merger, dated as of January 10, 2000, among Data
	Broadcasting Corporation, Pearson Longman, Inc., Detective
	Merger-Sub, Inc. and Interactive Data Corporation.
	(Appendix B to Companys Schedule 14A filed on
	January 11, 2000.)                      
|        | 2.3   |                         |  | Agreement, dated as of December 27, 2000,
	among Data Broadcasting Corporation and Pearson Overseas
	Holdings Limited. (Exhibit 99.1 to Companys
	Form 8-K filed on January 23, 2001.)                                                                                                             
|        | 2.4   |                         |  | Asset Sale and Purchase Agreement, dated as of
	December 31, 2001, between Merrill Lynch, Pierce, Fenner
	& Smith Incorporated and FT Interactive Data Corporation, as
	amended. (Exhibit attached). (Portions of this exhibit have been
	omitted pursuant to a request for confidential treatment.)
|        | 3.1   |                         |  | Amended and Restated Certificate of Incorporation
	of Interactive Data Corporation, as amended. (Exhibit attached)                                                                                                                                                                                  
|        | 3.2   |                         |  | Bylaws of Interactive Data Corporation, as
	amended. (Exhibit 3.2 to Companys Form 8-A filed
	on June 15, 1992.)                                                                                                                                                                                   
|        | 10.1  |                         |  | Registration Rights Agreement, dated as of
	June 25, 1992, between Financial News Network, Inc., on the
	one hand, and Allan R. Tessler and Alan J. Hirschfield, on the
	other hand. (Exhibit 28.5 to Companys Form 8-K
	filed on June 30, 1992.)                                                  
|        | 10.2  |                         |  | Data Broadcasting Corporation Stock Option Plan,
	as amended through September 13, 1994. (Exhibit 10.2
	to Companys Form 10-K for the year ended
	December 31, 2000, filed on March 28, 2001.)**                                                                                                   
|        | 10.3  |                         |  | Data Broadcasting Corporation 2000 Long Term
	Incentive Plan. (Exhibit 10.3 to Companys
	Form 10-K for the year ended December 31, 2000, filed
	on March 28, 2001)**                                                                                                                               
|        | 10.4  |                         |  | Letter Agreement, dated November 14, 1999,
	between Data Broadcasting Corporation and Alan J. Hirschfield.
	(Exhibit 10.4 to Companys Form 10-K for the year
	ended December 31, 2000, filed on March 28, 2001.)**                                                                                 
|        | 10.5  |                         |  | Letter Agreement, dated November 14, 1999,
	between Data Broadcasting Corporation and Allan R. Tessler.
	(Exhibit 10.5 to Companys Form 10-K for the year
	ended December 31, 2000, filed on March 28, 2001.)**                                                                                    
|        | 10.6  |                         |  | Trade Mark License Agreement, dated March 7,
	2001, between Data Broadcasting Corporation and The Financial
	Times Limited. (Exhibit 10.7 to Companys
	Form 10-K for the year ended December 31, 2000)                                                                                             
|        | 10.7  |                         |  | Employment Agreement with Steven G. Crane, dated
	October 15, 1999. (Exhibit 10.13 to Companys
	Form 10-K for the year ended December 31, 2000.)**                                                                                                                                                 
|        | 10.8  |                         |  | Interactive Data Corporation 2001 Employee Stock
	Purchase Plan. (Exhibit attached)**                                                                                                                                                                                                               
|        | 10.9  |                         |  | 2001 Amendment to Interactive Data Corporation
	2001 Employee Stock Purchase Plan. (Exhibit attached)**                                                                                                                                                                                             
|        | 10.10 |                         |  | Rules of the Interactive Data Corporation UK
	Savings Related Share Option Plan. (Exhibit attached)**                                                                                                                                                                                               
|        | 10.11 |                         |  | Management Services Agreement, dated as of
	November 29, 2001, between Pearson plc and Interactive Data
	Corporation. (Exhibit attached)                                                                                                                                                            
|        | 10.12 |                         |  | The Pearson Reward Plan. (Exhibit attached)**                                                                                                                                                                                                                                                       
|        | 10.13 |                         |  | The Pearson 1988 Executive Share Option Plan.
	(Exhibit attached)**                                                                                                                                                                                                                                 

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##### Table of Contents



INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES


For the Years Ended December 31, 2001,
2000, and 1999  (Continued)

|        |       |                         |  |                                                                                               
|------- | ----- | ----------------------- |  | ----------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Exhibits
|        |       |                        
|        | 10.14 |                         |  | Rules of the Pearson plc 1992 United States
	Executive Share Option Plan. (Exhibit attached)**
|        | 10.15 |                         |  | The Pearson 1998 Executive Share Option Plan.
	(Exhibit attached)**                           
|        | 10.16 |                         |  | Pearson plc Annual Bonus Share Matching Plan.
	(Exhibit attached)**                           
|        | 10.17 |                         |  | Pearson, Inc. Excess Savings and Investment Plan.
	(Exhibit attached)**                       
|        | 10.18 |                         |  | Pearson, Inc. Supplemental Executive Retirement
	Plan. (Exhibit attached) **                  
|        | 21    |                         |  | Subsidiaries of the Registrant.                                                               
|        | 23    |                         |  | Consent of PricewaterhouseCoopers LLP.                                                        



---



| |   |                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------
| | * | Exhibits followed by a parenthetical reference
	are incorporated by reference herein from the document described
	therein.



|   |                                                         
|-- | --------------------------------------------------------
|** | Management contract or compensation plan or
	arrangement

A.     Reports on
Form 8-K

During the quarter ended December 31, 2001,
the Company did not file a Current Report on Form 8-K.

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##### Table of Contents



SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Company has
duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



| |                             
| | ----------------------------
| | INTERACTIVE DATA CORPORATION



| |     |                    
| | --- | -------------------
| | By: | /s/ STUART J. CLARK

| |                        
| | -----------------------
| |                        
| | Stuart J. Clark        
| | Chief Executive Officer

March 22, 2002

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons in the capacities and on the dates indicated.

|                                           |  |                         |  |                |  | 
|------------------------------------------ |  | ----------------------- |  | -------------- |  | 
|                                           |  |                         |  |               
|Signature                                  |  | Title                   |  | Date          
|                                           |  |                         |  |               
|                                          
|Principal Executive Officer:               |  |                         |  |               
|/s/ STUART J. CLARKStuart J. Clark         |  | Chief Executive Officer |  | March 22, 2002
|                                          
|Principal Financial Officer:               |  |                         |  |               
|                                          
|/s/ STEVEN G. CRANESteven G. Crane         |  | Chief Financial Officer |  | March 22, 2002
|                                          
|Directors:                                 |  |                         |  |               
|                                          
|/s/ STUART J. CLARKStuart J. Clark         |  | Chief Executive Officer |  | March 22, 2002
|                                          
|/s/ DONALD P. GREENBERGDonald P. Greenberg |  | Director                |  | March 22, 2002
|                                          
|/s/ ALAN J. HIRSCHFIELDAlan J. Hirschfield |  | Director                |  | March 22, 2002
|                                          
|/s/ WILLIAM ETHRIDGEWilliam Ethridge       |  | Director                |  | March 22, 2002
|                                          
|/s/ CARL SPIELVOGELCarl Spielvogel         |  | Director                |  | March 22, 2002
|                                          
|/s/ JOHN FALLONJohn Fallon                 |  | Director                |  | March 22, 2002

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|                                       |  |                       |  |                |  | 
|-------------------------------------- |  | --------------------- |  | -------------- |  | 
|                                       |  |                       |  |               
|Signature                              |  | Title                 |  | Date          
|                                       |  |                       |  |               
|                                      
|/s/ STEPHEN HILLStephen Hill           |  | Chairman of the Board |  | March 22, 2002
|                                      
|/s/ PHILIP J. HOFFMANPhilip J. Hoffman |  | Director              |  | March 22, 2002
|                                      
|/s/ GILES SPACKMANGiles Spackman       |  | Director              |  | March 22, 2002
|                                      
|/s/ ALLAN R. TESSLERAllan R. Tessler   |  | Director              |  | March 22, 2002

52