EXHIBIT 99.1

 

 

 

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Recent Financial

Results

 

Dara Khosrowshahi

Executive Vice President & CFO

 

 

 

Gross Transaction Value

 

[CHART]

 

IAC/InterActiveCorp

 

 

Revenue

 

[CHART]

 

 

Includes results from continuing operations. 2002 is pro forma for Expedia.

 

 

 

OIBA

 

[CHART]

 

Includes results from continuing operations. 2002 is pro forma for Expedia.

 

 

 

Q3 P&L Summary

 

$ in millions, except per share data		Q3 03			Q3 02			GROWTH %
Revenue		$	1,610		$	1,185		36	%
OIBA		192			96			100	%
Net Income		19			(37		)	nm
Diluted EPS		$	0.02		$	(0.07	)	nm
Adjusted Net Income		$	130		$	47		173	%
Adjusted Shares Outstanding		786			688			14	%
Adjusted EPS		$	0.17		$	0.07		153	%

 

Includes results from continuing operations.

 

 

 

Q3 Charges

 

$ in millions, except per share data		Q3 03			Q3 02			GROWTH %
OIBA after Charges		192			96			100	%
CHARGES:
Hotels.com		4			—
TVTS Satellite Contract		5			—
PRC Real Estate & Software		2			—
HSN Italy Write-Off		—			31
Total Charges/OIBA Impact		$	11		$	31
OIBA before Charges		$	203		$	127		60	%
Adjusted Net Income before Charges		$	141		$	79		79	%

 

 

 

Q3 Segment Financials

 

$ in millions		REVENUE								OIBA
		2002			2003			GROWTH %		2002			2003			GROWTH %
IAC Travel		$	459		$	734		60	%	$	84		$	138		64	%
Electronic Retailing		450			526			17	%	8			48			515	%
Ticketing		162			178			10	%	26			32			25	%
Personals		34			48			44	%	5			10			107	%
Local Services		8			29			283	%	(7		)	(18		)	159	%
Financial Services & Real Estate		—			24			nm		—			3			nm
Teleservices		75			76			1	%	1			2			99	%
Corporate & Other		(2		)	(5		)	nm		(21		)	(23		)	nm
Total		$	1,185		$	1,610		36	%	$	96		$	192		100	%

 

 

 

 

 

Leverage

 

SELLING & MARKETING as % OF REVENUE

 

[CHART]

 

Sources: IAC public filings. YTD 2003 OIBA margin is before “unusual” charges in Q3 03 as discussed on Q3 earnings release.

 

 

 

 

Free Cash Flow

 

[CHART]

 

 

 

 

Travel Working Capital

(Expedia & Hotels. com)

 

$ in millions		2002			2003E
Increase in Gross Bookings		$	2,834		$	3,000+
Increase in Working Capital		$	220		$	310 - $360
Increase in Working Capital as % of Gross Bookings Increase		~8		%	~10		%

 

 

 

 

YTD Cash Deployment

 

[CHART]

 

Acquisitions include Hotwire and Anyway. com (transactions pending). Repurchases include stock, bonds and warrants.

 

 

 

Current Capitalization

 

[CHART]

 

Proforma for acquisitions of Hotwire and Anyway. com (transaction pending).

 

 

 

Cash Cushion

 

$ in millions
Pro Forma 9/30/03 Cash Balance		$3,790
Stock Repurchases (50m Shares @ $35)		$(1,750	)
Available Cash		$2,040
Cash Cushion (working capital, growth, acquisitions)		$(1,500) - $(2,000	)
Excess Cash		$40 - $540
VUE Securities		$2,200
Cash & Securities Available		$2,240 - $2,740

 

 

9/30/03 cash balance pro forma for acquisitions of Hotwire and Anyway.com (transaction pending).

 

 

 

2004 Growth Initiatives

 

IAC/Travel		IAC/Electronic Retailing		IAC/Ticketing		IAC/Personals
• International		• Customer Service		• Upgrade of Core Technology		New products
• Corporate Travel		• Fulfillment capabilities		• International Rebuild		• Advanced Search
• New Products				• New products		• Community
						• Quizlets
						• Events
IAC/Local Services		IAC/Financial Services & Real Estate				Interactive Development
• Online product		• Real Estate				• New ideas
• Registered card		• New technology
• Pay for Performance

 

 

 

2004 Growth Initiatives

 

[CHART]

 

 

 

OIBA Growth Estimate

 

[CHART]

 

 

 

Perspective

 

            •   Focus on near term and long term financial performance

 

            •   Significant free cash flow generation

 

            •   Strong balance sheet

 

            •   Use business leverage to invest in growth initiatives

 

EXHIBIT 99.2

 

 

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Long Term

Goals

 

Victor Kaufman

Vice Chairman

 

 

IAC/Travel

 

		LTM			2006			2008
Revenue		$	2,412		$	6,200		$	9,600
OIBA		445			1,200			2,000

 

[CHART]                               [CHART]

 

 

IAC/Electronic Retailing

 

		LTM			2006			2008
Revenue		$	2,149		$	3,100		$	3,800
OIBA		204			380			550

 

[CHART]                               [CHART]

 

 

 

IAC/Ticketing

 

		LTM			2006			2008
Revenue		$	725		$	900		$	1,100
OIBA		133			200			280

 

[CHART]                               [CHART]

 

 

 

IAC/Personals

 

		LTM			2006			2008
Revenue		$	175		$	370		$	450
OIBA		33			80			100

 

[CHART]                               [CHART]

 

 

 

IAC/Financial Services & Real Estate

 

		2003			2006			2008
Revenue		$	164		$	290		$	420
OIBA		29			90			130

 

[CHART]                               [CHART]

 

 

IAC/Local Services

 

 

		LTM			2006			2008
Revenue		$	256		$	450		$	730
OIBA		24			90			150

 

[CHART]                               [CHART]

 

LTM pro forma for EPI acquisition.

 

 

Strong Cash Flow Generation

 

[CHART]

 

IAC/InterActiveCorp

 

 

Long Term Goal - Revenue

 

$ in millions		LTM			2006			2008			‘03 - ‘08 CAGR %
IAC Travel		$	2,412		$	6,200		$	9,600		30	%
Electronic Retailing		2,149			3,100			3,800			11	%
Ticketing		725			900			1,100			9	%
Personals		175			370			450			19	%
Local Services		256			450			730			26	%
Financial Services & Real Estate		24			290			420			47	%
Teleservices		294			360			440			9	%
Inter-segment Eliminations		(16		)	(40		)	(50		)	nm
Total Revenue		$	6,018		$	11,600		$	16,500		21	%

 

Local services is pro forma for EPI.

 

 

 

Long Term Goal - OIBA

 

$ in millions		LTM			2006			2008			‘03 - ‘08 CAGR%
IAC Travel		$	445		$	1,200		$	2,000		32	%
Electronic Retailing		204			380			550			20	%
Ticketing		133			200			280			16	%
Personals		33			80			100			28	%
Local Services		24			90			150			49	%
Financial Services & Real Estate		3			90			130			82	%
Teleservices		10			25			35			35	%
Corporate & Other		(97		)	(160		)	(210		)	nm
Total OIBA		$	755		$	1,900		$	3,000		30	%

 

Local services is pro forma for EPI.

 

 

 

P&L Impact

 

$ in billions, except per share data		2006			2008			‘03 to ‘08 CAGR%
Revenue		$	11.6		$	16.5		~20	%
Operating Income		1.6			2.8			~85	%
OIBA		1.9			3.0			~30	%
GAAP Diluted EPS		$	1.40		$	2.55		nm
Adjusted EPS		$	1.70		$	2.65		~30	%

 

 

 

The ‘Value’ of Growth Companies

 

[CHART]

 

 

Beta represents 5-Year Beta. Source of EPS Growth rates: FirstCall consensus estimates, except IAC.

 

 

 

Q&A

 

 

 

Safe 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. These forward-looking statements include statements relating to IAC’s anticipated financial performance, business prospects, new developments, and similar matters, and/ or statements preceded by, followed by or that include the words “believes,” “could,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “seeks,” or similar expressions. 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 forward-looking statements are subject to risks, uncertainties and assumptions that could have a material adverse effect on IAC’s business, financial condition or results of operations. You should understand that the following important factors could affect IAC’s future results and could cause those results to differ materially from those expressed in the forward-looking statements: (1) the risk that IAC’s businesses will not be integrated successfully; (2) material adverse changes in economic conditions generally or in such conditions affecting IAC’s markets or industries; (3) future regulatory and legislative actions and conditions affecting IAC’s operating areas; (4) competition from others; (5) successful integration of our businesses’ management structures; (6) product demand and market acceptance; (7) the ability to protect proprietary information and technology or to obtain necessary licenses on commercially reasonable terms; (8) the ability to maintain the integrity of IAC’s systems and infrastructure; (9) the ability to expand into and successfully operate in foreign markets; (10) obtaining and retaining skilled workers and key executives, (11) acts of terrorism; and (12) war or political instability. In addition, investors should consider the other information contained in or incorporated by reference into 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 2002, 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, uncertainties, assumptions and factors, the forward-looking events discussed in this presentation may not occur. These forward-looking statements should not be regarded as an indication that IAC considers them to be a reliable prediction of future events. 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 does not make any representations to any person regarding the ultimate performance of IAC compared to the information contained in this presentation and IAC is not under any obligation and does not intend, except as specifically stated, 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 hereof or to reflect the occurrence of future events even if experience or future events make it clear that any or all of the assumptions underlying the information contained herein are shown to be in error or any expected results expressed or implied by those forward-looking statements will not be realized.

 

EXHIBIT 99.3

 

 

 

 

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Appendix: Reconciliation

 

 

 

Definitions

 

Operating Income Before Amortization (“OIBA”) is defined as operating income plus: (1) amortization of non-cash distribution, marketing and compensation expense, (2) amortization of intangibles and goodwill impairment, if applicable, (3) pro forma adjustments for significant acquisitions and (4) one-time items.  See below for explanations of these adjustments.

 

Adjusted Net Income generally captures all income statement items that have been, or ultimately will be, settled in cash and is defined as net income available to common shareholders plus: (1) amortization of non-cash distribution, marketing and compensation expense, (2) amortization of intangibles and goodwill impairment, if applicable, (3) pro forma adjustments for significant acquisitions, (4) equity income or loss from IAC’s5.44% interest in VUE, and (5) one-time items, net of related tax and minority interest.

 

Adjusted EPS is defined as Adjusted Net Income divided by weighted fully diluted shares outstanding for Adjusted EPS purposes.  We include dilution from options and warrants per thetreasury stock method and include all shares relating to restricted stock/share units (“RSU”) in shares outstanding for Adjusted EPS.  This differs from the GAAP method for including RSUs, which treats them on a treasury method basis.  Shares outstanding for Adjusted EPS purposes are therefore higher than shares outstanding for GAAP EPS purposes.

 

Free Cash Flow is defined as net cash provided by operating activities, less capital expenditures, investments to fund HSN International unconsolidated operations and preferred dividends paid.  Free Cash Flow includes cash dividends received and tax related payments with respect to the VUE securities.

 

 

Index to Reconciliations

 

Certain non-GAAP measures that appear in the IAC presentation have previously been provided publicly, and reconciliations of these non-GAAP measures to the most comparable GAAP measure are available in  the Form 8-K filed by IAC with the Securities and Exchange Commission on November 5, 2003.  See below for a list of such non-GAAP items and the location in our SEC filings of the existing reconciliation.

 

Section/Slide Title		Metric		Location of Existing Reconciliation
Section: Electronic Retailing
Electronic Retailing Today		OIBA for HSN US 2003		Schedule 1
		OIBA for HSN Int’l 2003		Schedule 2
HSN U.S. Financial Summary		HSN US OIBA—1999 to 2003E		Schedule 1
HSN U.S. Significant Competitive Opportunity		HSN EBITDA for Last Twelve Months		Schedule 3
International Consolidated Summary		HSN Int'l OIBA—1999 to 2003E		Schedule 2
Section: Ticketing
Results have been strong		OIBA—2001, 2002 and LTM		Schedule 4, Schedule 10
5 year Growth build-up		OIBA—LTM and 2008E		Schedule 10

 

 

Index to Reconciliations

 

Section/Slide Title		Metric		Location of Existing Reconciliation
Section: LendingTree
Historical Performance		OIBA for 2000 to 2003 YTD		Schedule 5
Long Range Plans		OIBA for 2004E to 2008E		Schedule 6

 

 

Index to Reconciliations

 

 

Section/Slide Title		Metric		Location of Existing Reconciliation
Section: Recent Financial Results
OIBA		OIBA—FY 2002		Filed as part of exhibit 99.2 to IAC’s Form 8-K filed on November 5, 2003.
		OIBA—YTD 2003		Filed as part of exhibit 99.1 to IAC’s Form 8-K filed on November 5, 2003.
Q3 P&L Summary		OIBA—Q3 2003 and Q3 2002		Filed as part of exhibit 99.1 to IAC’s Form 8-K filed on November 5, 2003.
		Adjusted net income—Q3 2003 and Q3 2002		Filed as part of exhibit 99.1 to IAC’s Form 8-K filed on November 5, 2003.
		Adjusted EPS—Q3 2003 and Q3 2002		Filed as part of exhibit 99.1 to IAC’s Form 8-K filed on November 5, 2003.
Q3 Segment Financials		OIBA by Segment—Q3 2003 and Q3 2002		Filed as part of exhibit 99.1 to IAC’s Form 8-K filed on November 5, 2003.
Free Cash Flow		Free Cash Flow—FY 2002 and YTD 2003		Schedule 7
OIBA Growth Estimate		OIBA—2003 E		Schedule 8
		OIBA—2004 E		Filed as part of exhibit 99.3 to IAC’s Form 8-K filed on November 5, 2003.

 

 

Index to Reconciliations

 

 

Section/Slide Title		Metric		Location of Existing Reconciliation
Section: Long Term Goals
IAC Financial Services & Real Estate		OIBA—2003 E		Schedule 5
Strong Cash Flow Generation		Cumulative Free Cash Flow—2003E to 2008E		Schedule 9
Long Term Goal—OIBA		OIBA by Segment—LTM, 2006E and 2008E		Schedule 10, Schedule 11
P&L Impact		OIBA—2006E and 2008E		Schedule 11
		Adjusted EPS—2006E and 2008E		Schedule 11
		Adjusted EPS Shares Outstanding— 2006E and 2008E		Schedule 12

 

 

Reconciliations

 

 

Schedule 1 - HSN US OIBA to Operating Income

 

		Pro Forma
		1999			2000			2001			2002			2003E
OIBA		$	161		$	158		$	121		$	163		$	189
Amortization		(30		)	(32		)	(34		)	(33		)	(51		)
Operating income		$	131		$	125		$	87		$	130		$	139

 

 

 

Schedule 2 - HSN Int’l OIBA to Operating Income

 

		Pro Forma
		1999			2000			2001			2002			2003E
OIBA		$	8		$	10		$	(26	)	$	(62	)	$	31
Amortization		—			(1		)	(1		)	(1		)	(1		)
Operating income		$	8		$	9		$	(26	)	$	(62	)	$	30

 

 

Reconciliations

 

($ in millions)

 

 

Schedule 3 - HSN EBITDA to Operating Income

 

		LTM
EBITDA		$	288
Depreciation		(48		)
Amortization of Cable Fees		(60		)
Amortization of intangibles		(45		)
Operating income		$	135

 

 

 

Schedule 4 - Ticketing Reconciliations from OIBA to Operating Income

 

		2001			2002
OIBA		$	74		$	108
Amortization		(58		)	(11		)
Operating income		$	16		$	97

 

 

Reconciliations

 

Schedule 5 - LendingTree Reconciliations from OIBA to Operating Income ($ in millions)

 

		2000													2001
		Q1				Q2			Q3			Q4			Q1			Q2			Q3			Q4
Operating Income Before Amortization		$	(19		)	$	(18	)	$	(13	)	$	(11	)	$	(7	)	$	(6	)	$	(3	)	$	(2	)
Total Amortization		(1			)	(1		)	(2		)	(2		)	(3		)	(5		)	0			(2		)
Operating Income		$	(20		)	$	(19	)	$	(15	)	$	(13	)	$	(10	)	$	(11	)	$	(3	)	$	(4	)
		2002													2003 E
		Q1				Q2			Q3			Q4			Q1			Q2			Q3			Q4 E			FY
Operating Income Before Amortization		$		1		$	1		$	5		$	8		$	6		$	9		$	9		$	5		$	29
Total Amortization		(1			)	(2		)	(1		)	(1		)	(1		)	(1		)	(8		)	(11		)	(20		)
Operating Income		$		(1	)	$	(1	)	$	4		$	6		$	6		$	8		$	1		$	(6	)	$	9

 

 

Reconciliations

 

Schedule 6 - LendingTree Reconciliations from OIBA to Operating Income

 

		FY			FY			FY			FY			FY
		2004E			2005E			2006E			2007E			2008E
Operating Income Before Amortization		$	29		$	60		$	90		$	115		$	130
Total Amortization		(27		)	(21		)	(20		)	(16		)	(8		)
Operating Income		$	1		$	39		$	70		$	104		$	122

 

 

Reconciliations

 

($ in millions)

 

 

Schedule 7 - IAC Reconciliations from Free Cash Flow to Cash from Operations

 

		Q1		Q2		Q3		Q4		FY		Q1		Q2		Q3		2003
		2002		2002		2002		2002		2002		2003		2003		2003		YTD
Net cash provided by Operating activities		$187		$251		$186		$154		$778		$476		$463		$206		$1,145
Capital expenditures		(27	)	(46	)	(34	)	(55	)	(162	)	(34	)	(53	)	(43	)	(130	)
Investments to fund unconsol subs		(1	)	(26	)	(5	)	(0	)	(32	)	—		—		—		—
Tax distributions from VUE		—		—		—		—		—		—		1		—		1
Preferred dividend paid				(4	)	(3	)	(3	)	(10	)	(3	)	(3	)	(3	)	(10	)
FCF		$160		$175		$143		$96		$575		$439		$408		$160		$1,007

 

 

Reconciliations

 

($ in millions)

 

 

Schedule 8 - IAC 2003 E OIBA High End Reconciliation to Operating Income

 

		2003 High
		Range Forecast
OIBA		$	825
Amortization		(529		)
Merger costs		(11		)
Operating income		$	284

 

 

 

Schedule 9 - IAC Cumulative FCF to Cumulative Net Cash from Operations

 

		Cumulative
		FCF
Net Cash From Operations		$	12,706
Capital Expenditures		(1,778		)
Preferred Dividend		(79		)
Free Cash Flow		$	10,849

 

 

Reconciliations

 

($ in millions)

 

 

Schedule 10 - IAC Reconciliations from OIBA to Operating Income

 

		IAC Travel									Electronic Retailing									Ticketing
		LTM			2006E			2008E			LTM			2006E			2008E			LTM			2006E			2008E
OIBA		$	445		$	1,200		$	2,000		$	204		$	380		$	550		$	133		$	200		$	280
Amortization		(144		)	(118		)	(38		)	(44		)	(26		)	(1		)	(25		)	(23		)	(12		)
Merger costs		(12		)	—			—			—			—			—			(0		)	—			—
Operating Income		$	288		$	1,082		$	1,962		$	160		$	354		$	549		$	108		$	177		$	268
		Personals									Local Services									Financial Services & Real Estate
		LTM			2006E			2008E			LTM			2006E			2008E			LTM			2006E			2008E
OIBA		$	33		$	80		$	100		$	24		$	90		$	150		$	3		$	90		$	130
Amortization		(11		)	(2		)	—			(54		)	(6		)	(5		)	(8		)	(20		)	(8		)
Merger costs		—			—			—			(4		)	—			—			—			—			—
Operating Income		$	22		$	78		$	100		$	(34	)	$	84		$	145		$	(5	)	$	70		$	122
		Teleservices									Corporate and Other									Total IAC
		LTM			2006E			2008E			LTM			2006E			2008E			LTM			2006E			2008E
OIBA		$	10		$	25		$	35		$	(97	)	$	(160	)	$	(210	)	$	755		$	1,900		$	3,000
Amortization		—			—			—			(97		)	(134		)	(111		)	(383		)	(329		)	(176		)
Merger costs		—			—			—			—			—			—			(16		)	—			—
Operating Income		$	10		$	25		$	35		$	(194	)	$	(294	)	$	(321	)	$	355		$	1,571		$	2,824

 

 

Reconciliations

 

Schedule 11 - IAC Reconciliations from GAAP EPS to Adjusted EPS

 

$ in billions except per share data		2006E			2008E
OIBA		$	1.9		$	3.0
Amortization		(0.3		)	(0.2		)
Operating Income		1.6			2.8
Interest and Other Income		0.2			0.3
Income before Taxes and Minority Interest		1.8			3.1
Income Taxes		(0.7		)	(1.2		)
Minority Interest		(0.0		)	(0.0		)
Net Income before Preferred		1.1			1.9
Preferred Dividend		—			(0.0		)
Net Income Available to Common Shareholders		1.1			1.9
GAAP Diluted Shares (in millions)		755			730
GAAP EPS		$	1.40		$	2.55
Adjusted Net Income Calculation
Net Income		1.1			1.9
Amortization of non-cash items and intangibles		0.3			0.2
Impact of income taxes and minority interest		(0.1		)	(0.1		)
Adjusted Net Income		$	1.3		$	2.0
Adjusted Outstanding Shares (in millions)		766			741
Adjusted EPS		$	1.70		$	2.65

 

 

Reconciliations

 

Schedule 12 - IAC Reconciliations from GAAP Diluted Shares to Adjusted EPS Shares