EXPEDIA, INC. A complete travel commerce experience Exhibit 99.1 |
EXPEDIA, INC. Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the future financial and operational performance of the Company. These statements are not guarantees of future performance. These forward-looking statements are based on management’s expectations as of December 6, 2010, and assumptions which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. The use of words such as “believe,” “forecast,” “opportunity,” “intends,” “anticipates,” and “expects,” among others, generally identifies forward-looking statements. However, these words are not the exclusive means of identifying such statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements and may include statements relating to future revenues, expenses, margins, profitability, net income, earnings per share and other measures of results of operations and the prospects for future growth of Expedia, Inc.’s business. Actual results and the timing and outcome of events may differ materially from those expressed or implied in the forward-looking statements for a variety of reasons, including, among others: continued or prolonged adverse economic conditions leading to decreased consumer and business spending; changes in our relationships and contractual agreements with travel suppliers or global distribution system partners; adverse changes in senior management; the rate of growth of online travel; our inability to recognize the benefits of our investment in technologies; changes in the competitive environment, the e-commerce industry and broadband access and our ability to respond to such changes; declines or disruptions in the travel industry (including those caused by adverse weather, bankruptcies, health risks, war and/or terrorism); the rate of online migration in the various geographies and markets in which Expedia, Inc. operates, including Eastern Europe and Asia, fluctuations in foreign exchange rates, risks related to our long term indebtedness, including the ability to access funds as and when needed; changing laws, rules and regulations and legal uncertainties relating to our business; Expedia, Inc.’s ability to expand successfully in international markets; possible charges resulting from, among other events, platform migration; failure to realize cost efficiencies; the successful completion of any future corporate transactions or acquisitions; the integration of current and acquired businesses; and other risks detailed in Expedia’s, Inc.’s public filings with the SEC, including Expedia, Inc.’s annual report on Form 10-K for the year ended December 31, 2009 and subsequent Forms 10-Q. Except as required by law, Expedia, Inc. undertakes no obligation to update any forward-looking or other statements in this presentation, whether as a result of new information, future events or otherwise. Reconciliations of non-GAAP measures included in this presentation to the most comparable GAAP measures are included in Appendix A. Trademarks and logos are the property of their respective owners. © Expedia, Inc. All rights reserved. CST: #2029030-50 |
Expedia, Inc. is building the world’s largest and most intelligent travel marketplace. We generate revenue by addressing the entire travel commerce experience, enabling travelers to research, plan and book their trip, offering service while they travel, and providing the online forums to review hotels, discuss destinations and share experiences. |
Number of unique visitors to Expedia, Inc. sites worldwide each month 73+ million The world’s largest travel marketplace Source: comScore Sept. 2010, unduplicated |
Serving travelers in over 60 countries The world’s largest travel marketplace |
160+ booking and travel media sites The world’s largest travel marketplace |
Offering hotels in over 200 countries The world’s largest travel marketplace |
EXPEDIA, INC. Where to go Pricing and deals Where to stay Best airplane seat Things to do Research & Planning Addressing the entire travel commerce experience |
EXPEDIA, INC. Air Hotel Vacation packages Cruise Rental car Insurance Activities Booking Research & Planning Addressing the entire travel commerce experience |
EXPEDIA, INC. Concierge services Destination guides Mobile apps 24-hour customer service Booking Research & Planning Addressing the entire travel commerce experience Traveler forums Hotel reviews Destination videos Travel & Sharing |
TripAdvisor ® is the world’s largest travel community, with the largest collection of traveler reviews and content on destinations and travel accommodations. TripAdvisor Media Network 40 million monthly unique visitors Source: comScore August 2010, unduplicated |
TripAdvisor is the world’s largest travel community, with the largest collection of traveler reviews and content on destinations and travel accommodations. TripAdvisor Media Network 20 million registered users |
18 TripAdvisor Media Network brands TripAdvisor is the world’s largest travel community, with the largest collection of traveler reviews and content on destinations and travel accommodations. TripAdvisor Media Network |
Operating in 24 countries TripAdvisor is the world’s largest travel community, with the largest collection of traveler reviews and content on destinations and travel accommodations. TripAdvisor Media Network |
TripAdvisor is the world’s largest travel community, with the largest collection of traveler reviews and content on destinations and travel accommodations. TripAdvisor Media Network 40 million hotel reviews |
EXPEDIA, INC. Content and advice for all aspects of travel World’s largest travel community Air travel content & community |
EXPEDIA, INC. Content and advice for all aspects of travel Traveler content and community sites |
EXPEDIA, INC. Content and advice for all aspects of travel Travel deals and price comparison |
EXPEDIA, INC. 77% 58% 22% +10% +11% +15% 54% 37% 21% Internet penetration Estimated online advertising growth Estimated online share of consumer travel spending Global online ad market expected to reach ~$100 billion by 2014 Global market opportunity for online travel media Sources: www.internetworldstats.com Online Advertising growth = CAGR 2010 - 2014 estimated using eMarketer Sept. 2010 report as the primary source PhoCusWright studies spanning 2009 and 2010 Online Advertising market eMarketer September 2010 report |
EXPEDIA, INC. Serving travelers across the globe 100% YOY growth in each of the last four quarters TripAdvisor international third-party revenue now ~40% |
TTM revenue of $401 million Monetizing travel media Expedia’s robust and fast- growing advertising and media businesses make us unique in the industry, and allow us maximum flexibility as the industry evolves. As of Sept. 30, 2010 |
Monetizing travel media Expedia’s robust and fast- growing advertising and media businesses make us unique in the industry, and allow us maximum flexibility as the industry evolves. An increase of +34% year over year |
Monetizing travel media Expedia’s robust and fast- growing advertising and media businesses make us unique in the industry, and allow us maximum flexibility as the industry evolves. Percent of EI revenue TTM 12% |
Monetizing travel media Expedia’s robust and fast- growing advertising and media businesses make us unique in the industry, and allow us maximum flexibility as the industry evolves. OIBA margins of >50% |
We believe this can be a $1 Billion business. Monetizing travel media |
TripAdvisor Media Network A range of opportunities for travel advertisers |
EXPEDIA, INC. Cost-Per-Click (CPC) |
EXPEDIA, INC. Display (CPM) |
EXPEDIA, INC. Subscription-based Business Listings |
EXPEDIA, INC. A range of opportunities for travel advertisers Total TripAdvisor Gross Revenue (in millions) |
EXPEDIA, INC. Media products on booking sites |
96 leisure booking sites Nobody matches supply with demand on a global basis at our scale. Booking the trip |
Nobody matches supply with demand on a global basis at our scale. Booking the trip Serving travelers in over 60 countries |
Nobody matches supply with demand on a global basis at our scale. Booking the trip 300+ airlines |
130K hotels Nobody matches supply with demand on a global basis at our scale. Booking the trip |
EXPEDIA, INC. Unpublished rate booking site Hotel specialist with over 70 sites in over 60 countries Booking the trip World’s largest OTA, focusing on the whole trip 5 th largest full-service corporate travel management company in the world |
EXPEDIA, INC. Booking the trip Luxury travel provider Offline cruise travel agency with retail presence Leading Chinese OTA Italy-based agency hotel bookings provider Online car rentals consolidator |
EXPEDIA, INC. $255B $293B $212B Size of travel market Online penetration 54% 37% 21% Source: PhoCusWright studies spanning 2009 and 2010 Global market opportunity for online travel bookings Estimated Online Penetration Estimated Online Penetration |
EXPEDIA, INC. Serving travelers across the globe |
EXPEDIA, INC. Maintaining the broadest supply portfolio Hotel • >130,000 hotels offered making up ~60% of EXPE worldwide annual revenue (TTM) • ~55% merchant model hotels • ~25% agency model hotels • Expedia accounts for 7% of room nights in the Top 20 U.S. markets Air • Air revenue ~12% of EXPE worldwide annual revenue (TTM) • Revenue largely unit / volume driven Cruise, Car and Destination Services comprise >10% worldwide annual revenue (TTM) >15% of EXPE gross bookings are package or multi-component transactions for same itinerary (TTM) Source for 7% room night share stat = STR YTD through Sept. 2010 |
EXPEDIA, INC. Collaboration & Integration = Growth Global supply team serves booking brands Booking sites in over 60 countries Enters new markets TripAdvisor’s first advertisers Drives traffic to booking sites Customer volume and reach = value to suppliers |
EXPEDIA, INC. There is a huge worldwide market opportunity as additional travel dollars move online around the world. Taking flight off an extended runway Worldwide travel market $>760 billion <40% online penetration Worldwide Internet penetration 29% 445% growth rate Expedia 9.30 TTM leisure revenue $2.8 billion 9% growth rate Expedia 9.30 TTM media revenue $401 million 34% growth rate Sources: PhoCusWright studies spanning 2009 and 2010, www.internetworldstats.com |
EXPEDIA, INC. Virtuous Cycle The bigger and better we get, the bigger and better we get. |
EXPEDIA, INC. Diverse revenue streams Geographic Split (TTM 9.30.10) Revenue Product Categories (TTM 9.30.10) Hotel 63% Revenue Air 12% Advertising & Media 12% Car, Cruise & Other 13% |
EXPEDIA, INC. Solid performance… • Positive top-line growth • 3Q10 YOY revenue growth two times faster than 2Q10 YOY revenue growth • Continue to generate substantial revenue, profits and free cash flow 13% 8% 16% 10% 24% 3% 15% 14% 32% See Appendix A for reconciliation to GAAP number |
EXPEDIA, INC. Stable supplier economics Trended Revenue Margin (TTM) |
EXPEDIA, INC. Since 2006 generated $2.9B in free cash flow and returned $2.1B to shareholders through share repurchases and dividends Generating cash, returning it to shareholders Trended Free Cash Flow (TTM) |
EXPEDIA, INC. Appendix A - Non-GAAP Items Operating Income Before Amortization (“OIBA”) is defined as operating income plus: (1) stock-based compensation expense, including compensation expense related to certain subsidiary equity plans; (2) acquisition-related impacts, including (i) amortization of intangible assets and goodwill and intangible asset impairment, and (ii) gains (losses) recognized on changes in the value of contingent consideration arrangements; (3) certain infrequently occurring items, including restructuring; (4) charges incurred, if any, for monies that may be required to be paid in advance of litigation in certain occupancy tax proceedings; and (5) gains (losses) realized on revenue hedging activities that are included in other, net. OIBA margin is OIBA divided by net revenue. Adjusted Net Income generally captures all items on the statements of operations that occur in normal course operations and have been, or ultimately will be, settled in cash and is defined as net income/(loss) attributable to Expedia, Inc. plus net of tax: (1) stock-based compensation expense, including compensation expense related to certain subsidiary equity plans; (2) acquisition-related impacts, including (i) amortization of intangible assets, including as part of equity-method investments, and goodwill and intangible asset impairment, (ii) gains (losses) recognized on changes in the value of contingent consideration arrangements, and (iii) gains (losses) recognized on noncontrolling investment basis adjustments when we acquire controlling interests; (3) mark to market gains and losses on derivative instruments assumed at Spin-off; (4) currency gains or losses on U.S. dollar denominated cash or investments held by eLong; (5) certain other infrequently occurring items, including restructuring charges; (6) charges incurred, if any, for monies that may be required to be paid in advance of litigation in certain occupancy tax proceedings; (7) discontinued operations; and (8) the noncontrolling interest impact of the aforementioned adjustment items. We believe Adjusted Net Income is useful to investors because it represents Expedia, Inc.’s combined results, taking into account depreciation, which management believes is an ongoing cost of doing business, but excluding the impact of other non-cash expenses, infrequently occurring items and items not directly tied to the core operations of our businesses. |
EXPEDIA, INC. Appendix A - Non-GAAP Items (figures in $000s) 3 Months Ended 3 Months Ended 3 Months Ended 31-Mar-10 30-Jun-10 30-Sep-10 OIBA $142,544 $219,472 $293,650 Amortization of intangible assets (9,028) (8,344) (8,126) Stock-based compensation (18,892) (14,651) (13,021) Restructuring charges - - - Occupancy tax assessments and legal reserves - - Realized loss (gain) on revenue hedges (2,450) (2,787) 4,301 Operating income 112,174 193,690 276,804 Interest expense, net (20,608) (18,988) (24,539) Other, net 568 817 (13,657) Provision for income taxes (31,535) (60,166) (60,584) Net income attributable to noncontrolling interests (1,204) (1,091) (1,474) Net income attributable to Expedia, Inc. $59,395 $114,262 $176,550 Source: Company reports OIBA (Operating Income Before Amortization) |
EXPEDIA, INC. Appendix A - Non-GAAP Items Source: Company reports (figures in $000s) 3 Months Ended 3 Months Ended 3 Months Ended 31-Mar-10 30-Jun-10 30-Sep-10 Net income attributable to Expedia, Inc. $ 59,395 $ 114,261 $ 176,550 Amortization of intangible assets 9,028 8,344 8,126 Stock-based compensation 18,892 14,651 13,021 Restructuring charges - - - Foreign currency gain on U.S. dollar cash balances held by eLong (125) 873 1,358 Amortization of intangible assets as part of equity method investments - - - Noncontrolling interests (436) (783) (954) Provision for income taxes (9,023) (8,061) (6,838) Adjusted net income $ 77,731 $ 129,285 $ 191,263 Adjusted Net Income |
EXPEDIA, INC. Appendix A - Non-GAAP Items Free Cash Flow (figures in $000s) 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-09 30-Sep-10 Total Net cash provided by operating activities $617,440 $712,069 $520,688 $676,004 $937,717 $3,463,918 Less: capital expenditures (92,631) (86,658) (159,827) (92,017) (113,324) (544,457) Free cash flow $524,809 $625,411 $360,861 $583,987 $824,393 $2,919,461 Source: Company reports |