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Dara KhosrowshahiEVP & Chief Financial Officer
Deutsche Bank Media ConferenceJune 9, 2004
Prepared 6/9/04 with minor subsequent edits - Read important disclaimer(s)
2
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.
Prepared 6/9/04 with minor subsequent edits - Read important disclaimer(s)
3
Supplying Demand
Customer data includes duplication.
$60 Billion
40 mm Active CUSTOMERS
180 mm TRANSACTIONS
Thousands of PRODUCTS & SERVICES
140,000 SUPPLY PARTNERS
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Adding Value
Choice / Product DepthConvenience / Ease of Use
Great Values
Information / Relevance
Exclusivity / Uniqueness
CONSUMERS
Customer Acquisition
Multiple Distribution Channels
Market Segmentation
Marketing StrengthYield Management
SUPPLIERS
Leading Brands
Innovation & Technology
Scale
Merchandising
Capital
IAC aggregates
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Operating Multiple BrandsElectronic Retailing Ticketing
IAC Local & Media Services
Financial Services & Real EstatePersonals
IAC Travel
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Delivering Strong Results LTM
$1,813 revenue$548 OIBA
30% margin
Segment results for last twelve months (Q2 ’03 – Q1 ’04). IAC Travel revenue as if Hotels.com on net basis.
$2,288 revenue$202 OIBA
9% margin
$750 revenue$150 OIBA
20% margin
$193 revenue$35 OIBA
18% margin
$ in millions
$254 revenue$19 OIBA
8% margin
$161 revenue $21 OIBA
13% margin
Electronic Retailing TicketingIAC Travel
IAC Local & Media Services
Financial Services & Real EstatePersonals
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Leading the Market
$2T market$53B online; $6B TV
28% share of TV
#2
$28B market$3B online
66% share online
#1
$220B market$44B online
20% share online
#1
$1.5B market$450M online
30% share online
#1
$60B market$4B online
$5T market$185B online
20% share online
#2Ticketing 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.
Electronic Retailing TicketingIAC Travel
IAC Local & Media Services
Financial Services & Real EstatePersonals
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Mining Big Opportunities
• Online migration• Corporate• International• Destination
services
• Close gap w/ QVC• Multi-channel• Turnaround
Germany
• Unsold tickets• Box office share• Direct marketing• International
• 90 mm singles• Matching
technology• International• Social networking
• Search• Pay for
performance• Digital offers
• Online migration• Real estate• New products
Electronic Retailing TicketingIAC Travel
IAC Local & Media Services
Financial Services & Real EstatePersonals
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Travel
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IACT Portfolio
PackagesComplex itinerariesBusiness travel
Air ticketsHotel roomsRental cars
$$$$
$Simple Complex
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IACT Portfolio vs. Competitors
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IACT is Outpacing the Market$ in millions
Gross Bookings
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03 Q1 '04
Expedia
TravelocityOrbitz
Hotels.comPricelineTrip Network
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U.S. Hotel Occupancy Rates
Source: Smith Travel Research
35%
50%
65%
80%
Jan Feb Mar Apr May
2003 2004
Peak times
Low times: hotels need help
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IACT Key Challenges
Occupancy rates Marketing costs Pricing Raw margins
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$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Worldwide Opportunity
Global Travel+ Tourism
Travel
Destination Services
Travel
Destination Services
Travel
Destination Services
$2.6 trillion
Travel
Destination Services
Travel
Destination Services
Travel
DestinationServices
U.S.
$220 billion
Global
Europe
Other
US
Europe
Other
US
$850 billion
Europe
Other
US
Europe
Other
US
Europe
Other
US
Europe
Other
U.S.
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U.S. (Jan ‘98 - Dec ‘00) Europe (Jan ‘02 - Mar ‘04)
Gross Bookings
Europe is Tracking the U.S.$ in millions
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IACT Waves of Growth
20022002Domestic
20042004Europe
20052005Corporate
20062006Classic
20072007Asia
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Integrating Naturally
Exp
edia
Hot
els.
com
Hot
wir
e
City
sear
ch
EP
I
Tri
pAdv
isor
Per
sona
ls
Tic
ketin
g
Expedia
Hotels.com
Hotwire
Citysearch
EPI
TripAdvisor
Personals
Ticketing
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Integrating Naturally
$58mm intra-IACT in Q1 $75mm in sourcing savings over 3 yrs. Best practices
Paid search marketing Credit fraud protection Information technology
People movement Shared learning & expertise
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Growth
Goods
Travel
Ticketing Financial & Realty
xPersonals Local Services
$2,000
$550
$280
$130
$100
$524
$223
$144
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%
2003 and 2008 total OIBA is after corporate and other expenses.
$ in millions
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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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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$