dara khosrowshahi evp & cfo, iac
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Dara KhosrowshahiEVP & CFO, IAC
Piper Jaffray Technology ConferenceMay 20, 2004
Prepared 5/20/04 - Read important disclaimer(s)
2
$60 Billion in Demand
IAC
Tickets = $5B
Travel = $10B Goods = $2B
Mortgages = $36B
40 MM customers180 MM transactions
140K suppliers
Personals = $0.2B
Customer data includes duplication.
LocalTransactions = $7B
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3
Beneficial Relationships
World Leading Consumer
Brands
Technology &Innovation
Scale &Infrastructure
MerchandisingExpertise
Multi-Vertical
Capital
Customer Acquisition
Multiple Distribution Channels
Market Segmentation
Marketing Strength
Yield Management
Choice / Product Depth
Convenience / Ease of Use
Great Values
Information / Local Relevance
Exclusivity / Uniqueness
SUPPLIERS IAC aggregates
CONSUMERS
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4
IAC’s BrandsElectronic Retailing TicketingIAC Travel
IAC Local & Media Services
Financial Services & Real EstatePersonals
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5
Segment Results LTM
Electronic Retailing TicketingIAC Travel
IAC Local & Media Services
Financial Services & Real EstatePersonals
$1,813
$548
IAC Travel assumes Hotels.com revenue on a net basis. Financial Services & Real Estate includes LendingTree for the full period.
Revenue
OIBA
–
–
$ in millions
$2,288
$202
Revenue
OIBA
–
–
$750
$150
Revenue
OIBA
–
–
$193
$35
Revenue
OIBA
–
–
$254
$19
Revenue
OIBA
–
–
$161
$21
Revenue
OIBA
–
–
30% – Margin 9% – Margin 20% – Margin
18% – Margin 8% – Margin 13% – Margin
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Category Leaders U.S.
Electronic Retailing TicketingIAC Travel
IAC Local & Media Services
Financial Services & Real EstatePersonals
Ticketing includes event and movie ticketing. Data based on Jupiter and IAC estimates. Local includes directional advertising (newspapers, yellow pages, and coupons) only; excludes local TV/radio.
$2T total
$6B TV / $53B online
28% TV share
#2 position
$28B total
$3B online
66% online share
#1 position
$1.5B total
$450M online
30% online share
#1 position
$60B total
$4B online
$5T total
$185B online
20% online share
#2 position
$220B total
$44B online
20% online share
#1 position
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7
Large Opportunities in Every Business Electronic Retailing TicketingIAC Travel
IAC Local & Media Services
Financial Services & Real EstatePersonals
• U.S. travel only ~25% online
• Int’l travel = $630B • Corporate travel =
$125B
• QVC = 2.2x revenue, 4.5x EBITDA
• “Love the Customer”
• 525 mm tickets in our system; 61% go unsold
• Box office migration• Direct marketing to 20
mm registered users
• $450 mm category• 1 mm subscribers• 22 mm worldwide
monthly unique users
• U.S. local advertising = $60B
• U.S. local search = $1B
• 14 mm merchants; 80,000 IAC customers
• Consumer lending = $5T• LendingTree 0.7% share;
broadening product base• Real estate = $60B in
commissions
Local includes directional advertising (newspapers, yellow pages, and coupons) only; excludes local TV/radio.
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8
Travel Strategy
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9
IACT Portfolio of Brands
Air ticketsHotel roomsRental cars
PackagesComplex itinerariesBusiness travel
$$$$
$
Simple Complex
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10
IACT Portfolio vs. Competitors
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11
IACT: Outpacing the Market Gross Bookings
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03 Q1 '04
Expedia
TravelocityOrbitz
Hotels.comPricelineTrip Network
$ in millions
Prepared 5/20/04 - Read important disclaimer(s)
12
Worldwide Travel Opportunity
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
US Travel International Travel Global Travel &Tourism
Travel
Destination Services
$2.6 trillion
$850 billion
Europe
Other
$220 billion
US$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
US Travel International Travel Global Travel &Tourism
Travel
Destination Services
$2.6 trillion
$850 billion
Europe
Other
$220 billion
US$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
US Travel International Travel Global Travel &Tourism
Travel
Destination Services
$2.6 trillion
$850 billion
Europe
Other
$220 billion
US$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
US Travel International Travel Global Travel &Tourism
Travel
Destination Services
$2.6 trillion
$850 billion
Europe
Other
$220 billion
US$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
US Travel International Travel Global Travel &Tourism
Travel
Destination Services
$2.6 trillion
$850 billion
Europe
Other
$220 billion
US$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
US Travel International Travel Global Travel &Tourism
Travel
Destination Services
$2.6 trillion
$850 billion
Europe
Other
$220 billion
US
Prepared 5/20/04 - Read important disclaimer(s)
13
Long Term Goals
Goods
Travel
Ticketing Financial & Realty
xPersonals Local Services
$2,000
$550
$280
$130
$100
$524
$223
$144$1
$31$26
2003OIBA = $860
5-Year OIBA Goal = $3,000
CAGR Goal
$150
25% to 35%
20% to 25%
15% to 20%80% to 90%25% to 30%45% to 50%
$ in millions
2003 and 2008 total OIBA is after corporate and other expenses.
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14
IAC’s Competitive Advantage 43 leading brands Strong balance sheet Ability to invest aggressively in new
growth areas Shared learning and natural
relationships across Businesses Diversity & reduced volatility
Harnessing the power of interactivity to make people’s lives easier,
everywhere and everyday.
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16
ImportantSafe Harbor Statement Under The Private Securities Litigation Reform Act Of 1995 This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, particularly statements anticipating future growth in revenues and operating income before amortization. Words such as “believes,” “could,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “seeks,” or similar expressions used in connection with any discussion of future operating or financial performance identify forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of IAC’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties are described in IAC’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the fiscal year ended 2003, especially in the Risk Factors and the Management’s Discussion and Analysis sections, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Other unknown or unpredictable factors also could have material adverse effects on IAC’s future results, performance or achievements. In light of these risks and uncertainties, the forward-looking events discussed in this presentation may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this presentation. IAC is not under any obligation and does not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this presentation to reflect circumstances existing after the date of this presentation or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.
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18
Reconciliations$ in millionsRECONCILIATION OF LTM OPERATING INCOME BEFORE AMORTIZATION TO OPERATING INCOME
IAC Local & FinancialElectronic Media Services &
IAC Travel Retailing Ticketing Personals Services Real Estate
Operating Income Before Amortization 548$ 202$ 150$ 35$ 19$ 21$ Amortization and merger costs (186) (53) (27) (18) (57) (25) Operating Income 362$ 148$ 123$ 16$ (38)$ (4)$
Operating Income margin 20% 6% 16% 8% -15% -3%
LTM results for Financial Services and Real Estate include LendiingTree as of Q1 2003.
RECONCILIATION OF 2003 AND 2008 OPERATING INCOME BEFORE AMORTIZATION TO OPERATING INCOME
IAC Travel Electronic Retailing Ticketing2003 2008 2003 2008 2003 2008
Operating Income Before Amortization 524$ 2,000$ 201$ 550$ 145$ 280$ Amortization and merger costs (177) (38) (52) (1) (28) (12)
Operating Income 347$ 1,962$ 149$ 549$ 117$ 268$
Personals Local Services Financial Services & Real Estate2003 2008 2003 2008 2003 2008
Operating Income Before Amortization 31$ 100$ 26$ 150$ 1$ 130$ Amortization and merger costs (17) - (56) (5) (18) (8)
Operating Income 14$ 100$ (29)$ 145$ (17)$ 122$
Teleservices Corporate and Other Total IAC2003 2008 2003 2008 2003 2008
Operating Income Before Amortization 13$ 35$ (80)$ (210)$ 860$ 3,000$ Amortization and merger costs - - (113) (111) (460) (176)
Operating Income 13$ 35$ (193)$ (321)$ 400$ 2,824$
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