Expedia Group, Inc. · NASDAQ:EXPE
Expedia — Debt Investor Presentation (September 2009)
28 slides from Expedia's debt investor presentation, Sep 11, 2009
Slide 1: Expedia, Inc. Q2 2009 Company Overview
i, /expedia inc. Q2 2009 eaccan ne. 2 2009 Company Overview
Slide 2: Forward-Looking Statements
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 per
Slide 3: Global Opportunity
Global Opportunity Sources: U.S. Online Travel Overview 8th Edition Update: 2009 - 2010 (April 2009); U.S. Corporate Travel Distribution 4th Edition (July 2009); European Online Travel Overview 4th Edition Electronic Market Data Sheet (January 2009); European figures assume Euro/USD exchange rate in
Slide 4: World's Largest and Most Intelligent Travel Marketplace
World's Largest and Most Intelligent Travel Marketplace Suppliers Customers Hotels Airlines Car rental companies Cruise lines Global distribution system (GDS) partners Advertisers Leisure travelers Corporate travelers Travel service providers ("white label") Offline retail travel agents Secure super
Slide 5: Expedia - the Travel Sector Leader
Expedia - the Travel Sector Leader 1Sources: comScore MediaMetrix, July, 2009 & company data; 2 See Appendix B for reconciliation of non-GAAP to GAAP numbers. Adjusted EBITDA is calculated as operating income plus depreciation, restructuring charges, intangibles amortization, stock-based compensatio
Slide 6: Largest Worldwide Audience
Largest Worldwide Audience Source: comScore MediaMetrix, July 2009 1 Denotes Expedia's percentage difference over next largest competitor U.S. Worldwide Millions Millions UV's Expedia 27.572 Orbitz 12.81 Travelocity 9.878 Priceline 12.242 Yahoo 10.167 UV's Expedia 67.218 Orbitz 18.897 Priceline 31.9
Slide 7: Expedia's Virtuous Cycle
Expedia's Virtuous Cycle Growth / Scale More travelers Compelling supplier & advertising channel Better supplier economics Cash flow to improve traveler experience 7 User-generated content Scale drives opportunity to enhance supplier & traveler value propositions, reward stakeholders More ad revenue
Slide 8: Revenue by Product & Geography
Revenue by Product & Geography Product Categories (TTM 6.30.09) Geographic Segments (TTM 6.30.09) Hotel 0.63 Air 0.12 Advertising 0.1 Car Rental 0.15 Slice 6 Slice 7 Slice 8 Slice 9 Slice 10 Slice 11 Slice 12 Slice 13 Slice 14 Slice 15 Slice 16 Hotel 63% Revenue Air 12% * Hotel & Advertising - key r
Slide 9: Product Category - Hotel
Product Category - Hotel Business Overview Merchant Model Hotels (Supplier) Travelers Revenues to Expedia: Spread between the discounted rate provided by suppliers and sales price paid by travelers Service fees from travelers Other: Cash received on booking, revenue recognized at stay Revenue margin
Slide 10: Product Category - Advertising & Media
Product Category - Advertising & Media Ad & Media Brand Portfolio Business Overview Two primary businesses - TripAdvisor Media Network (leading global collection of user-generated content sites) Expedia Media Solutions (monetizing global Expedia, Hotels & Hotwire sites beyond transactions) TTM 6.30.
Slide 11: Product Category - Air
Product Category - Air Business Overview Air revenue < 15% of Expedia's worldwide annual revenue - - ~90% of airplane tickets sold over Expedia's online properties are agency transactions, in which Expedia acts as agent on behalf of a supplier and collects a commission - - Customer pays supplier dir
Slide 12: Stable Supplier Relationships & Economics
Stable Supplier Relationships & Economics Column 3 Column 4 Column 5 Column 6 Column 7 Column 8 Column 9 Column 10 Column 11 Column 12 Column 13 Column 14 Column 15 Column 16 1Q07 0.1268 2Q07 0.1261 3Q07 0.127 4Q07 0.12647 1Q08 0.1258 2Q08 0.1246 3Q08 0.1247 4Q08 0.1248 1Q09 0.1259 2Q09 0.1264 Stron
Slide 13: YTD 2009 Results
YTD 2009 Results Figures in $mm unless otherwise noted Unit Acceleration & Share Gains - Q209 room night growth of 26% v. 13% Q109; Q2 US room demand off (8%) per Smith Travel Air ticket growth improved to +13% in Q209 v. (4%) Q109; Global RPMs off (7%) Q209 Q208 y/y 1H09 1H08 y/y Transactions (mm)
Slide 14: Trended Free Cash Flow (TTM)
Trended Free Cash Flow (TTM) $millions '08 cash flows down due to taxes, slowing merchant hotel & cap ex Over $2B in free cash flow generated in past 4 years '09 cash flows stabilizing due to merchant hotel improvement & cap ex
Slide 15: Efficiently Managing Dilution
Efficiently Managing Dilution 10% reduction in share base since Q107 millions of adjusted diluted shares
Slide 16: Capitalization
Capitalization 1 Does not include $48mm of eLong cash invested in time deposits, $6mm Reserve Fund investment or $21mm in restricted cash 2 Total size of facility is $1bn; available capacity reduced by $50mm in outstanding letters of credit; $650mm of revolver was repaid in Q109 3 Based on 291mm dil
Slide 17: Trended Credit Metrics
Trended Credit Metrics Demonstrated strong credit metrics, consistent with investment grade rating 2005 2006 2007 2008 TTM 6.30.09 Total Debt / Adjusted EBITDA 0.3 0.8 1.5 2.0 1.2 Net Debt / Adjusted EBITDA N / A N / A 0.6 1.1 0.0 Adj. EBITDA / Interest Expense N / A 37.5 13.8 10.8 9.4 Free Cash Flo
Slide 18: Rating Agency Snapshot
Rating Agency Snapshot S&P (Analyst: Andy Liu) BB / Credit Watch Positive September 3 & April 17, 2009 Summaries: "lease-adjusted EBITDA coverage of interest and lease-adjusted total debt to EBITDA were 9.2x and 2.2x respectively. Although these credit measures are better than those of typical 'BB'
Slide 19: Summary
Summary Attractive macro tailwind as travel industry shifts online World's #1 online provider of travel-related services Leading traffic, supply, scale, bookings, revenue and cash flow Strong and complementary portfolio of brands and products Critical partner to airlines, hotels and other travel sup
Slide 20: Appendix A
Appendix A
Slide 21: Business Model - income statement (TTM 6.30.09)
Business Model - income statement (TTM 6.30.09) ($MM) Gross bookings $20,282 Revenue 2,860 Cost of revenue * 606 Selling and marketing * 1,014 General and administrative * 240 Technology and content * 284 "OIBA" (incl. $5mm hedge loss) * 710 OIBA margin 25% Stock-based compensation 61 Amortization o
Slide 22: Trended Historical Results
Trended Historical Results y/y growth 2005 2006 2007 2008 2006 2007 2008 Gross Bookings 15,336 16,882 19,632 21,269 10% 16% 8% Revenue 2,119 2,238 2,665 2,937 6% 19% 10% Cost of goods sold & operating expenses * 1,492 1,639 1,996 2,239 10% 22% 12% OIBA 627 599 670 698 (5%) 12% 4% OIBA Margin 30% 27%
Slide 23: Appendix B
Appendix B
Slide 24: Tabular Reconciliations For Non-GAAP Data: OIBA
Tabular Reconciliations For Non-GAAP Data Operating Income Before Amortization 12 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended June 30, 2009 June 30, 2009 June 30, 2009 June 30, 2008 June 30, 2008 OIBA $ 710,067 $ 342,203 $ 212,416 $ 329,910 $ 204,055 Amortization of inta
Slide 25: Tabular Reconciliations For Non-GAAP Data: OIBA Annual
Tabular Reconciliations For Non-GAAP Data Operating Income Before Amortization Year Ended Dec. 31, 2005 Year Ended Dec. 31, 2006 Year Ended Dec. 31, 2007 Year Ended Dec. 31, 2008 OIBA $ 627,441 $ 599,018 $ 669,487 $ 697,774 Amortization of intangible assets (126,067) (110,766) (77,569) (69,436) Amor
Slide 26: Tabular Reconciliations For Non-GAAP Data: Adjusted EBITDA
Tabular Reconciliations For Non-GAAP Data Adjusted Earnings Before Interest, Taxes, Depreciation & Amortization 12 Months Ended June 30, 2009 6 Months Ended June 30, 2009 3 Months Ended June 30, 2009 6 Months Ended June 30, 2008 3 Months Ended June 30, 2008 Adjusted EBITDA 800,932 391,632 237,209 36
Slide 27: Tabular Reconciliations For Non-GAAP Data: Adjusted EBITDA Annual
Tabular Reconciliations For Non-GAAP Data Adjusted Earnings Before Interest, Taxes, Depreciation & Amortization Year Ended Dec. 31, 2005 Year Ended Dec. 31, 2006 Year Ended Dec. 31, 2007 Year Ended Dec. 31, 2008 Adjusted EBITDA 677,886 647,797 729,013 774,574 Depreciation (50,445) (48,779) (59,526)
Slide 28: Tabular Reconciliations For Non-GAAP Data: Free Cash Flow
Tabular Reconciliations For Non-GAAP Data Free Cash Flow ($000's) TTM 3.07 TTM 6.07 TTM 9.07 TTM 12.07 TTM 3.08 Net cash provided by operating activities 703,569 831,140 859,228 712,069 737,792 Less: capital expenditures (97,925) (97,576) (82,671) (86,658) (101,514) Free cash flow 605,644 733,564 77
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